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Donald Trump’s challenges to China will impact economic ties and US businesses

Editor: Zhang Pengfei 丨Global Times

12-14-2016 08:53 BJT

US firms in China fear retribution as US President-elect Donald Trumpchallenges China on trade and Taiwan, Reuters reported on Tuesday. The president-elect seems immature when it comes to handling relations between the US and China, one of the most important bilateral relationships in the world. At the very least, Trump will shake the foundation of US firms doing business in China if the US walks away from its long-standing position that the Chinese mainland and Taiwan belong to one China.

The two nations have a close economic relationship and a host of American companies have operations across China. In the past two decades, exports from the US to China expanded by almost 300 percent and numerous jobs were created for American workers. However, the origins of this relationship trace back to the 1970s and the 1980s when the US and China normalized relations and signed three joint communiqués in which Washington acknowledged that "there is but one China and Taiwan is part of China." Sino-US ties will suffer a fatal blow if the Trump administration destroys this foundation for bilateral relations.

US coffee giant Starbucks has nearly 2,500 stores in the Chinese mainland, which is also a crucial market for other established American brands. In an unexpected scenario, Starbucks may perhaps have to watch its competitor, the UK's Costa, seize market shares in the mainland if American brands suffer in the fallout spurred by Trump.

As can be seen, business for some Japanese firms started to shrink in 2012 when the Sino-Japanese relationship was damaged over a territorial dispute for the Diaoyu Islands. US firms doing business in China are likely to suffer a heavier loss if Washington questions the One China policy.

However, US companies are not looking for an unneeded economic conflict with China. James Zimmerman, chairman of the American Chamber of Commerce in China, stressed that "American business operating in Asia needs certainty and stability."

In addition, many Asian countries like Japan and South Korea that are involved in international industrial chains linking China and the US will also feel the chill from an economic conflict between the two powers. Trump's challenges to China will cause complaints from those countries if their companies suffer losses. Global industrial chains cannot be changed overnight and the president-elect will be seen as a madman if he tries to disrupt the existing global economic order.

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