US companies operating in China are voicing concerns about excessive production, which is contributing to a price war that’s harming their profits. The issue has raised questions about the impact of China’s economic strategy on its foreign partners.
Several US firms have expressed frustration with the Chinese government’s decision to prioritize exports over profit margins. This has led to a surge in production, resulting in low prices and thin profit margins for companies like Apple, Intel, and Cisco Systems.
The situation is causing anxiety among US businesses, particularly those in the technology sector. They argue that China’s “Made in China 2025” initiative, which aims to boost domestic industry, has led to an overreliance on exports and a lack of emphasis on profit sustainability.
As the price war intensifies, US companies are seeking relief from the Chinese government. Some have called for stricter regulations to prevent excessive production and ensure fair competition. Others are exploring alternative manufacturing options in other countries, such as Vietnam and India.
The situation highlights the complexities of China’s economic strategy and its impact on foreign partners. While China’s export-driven growth has lifted many countries out of poverty, it also poses significant risks to businesses that rely on Chinese suppliers or trade partners.
For US companies operating in China, the overproduction crisis is a pressing issue that requires urgent attention from policymakers and business leaders.
Source: https://www.ft.com/content/9a0814c2-381c-462a-aae5-ffcabd999b93