Free Essay. Chinese Business Partnerships With U.S. Companies

The allegations by Peter Navarro that China is responsible for the economic problems that currently challenge the United States are right. It is a fact that China has emerged as America's biggest competitor in the global market and is keen on taking greater control of all national economies in the world (Zhu, 2019). China is known for entering the said partnerships for selfish gains such as shifting manufacturing to its low-cost market, lowering US trade tariffs, and expanding its export market. Therefore, while the Sino-US business partnerships may have some benefits for American corporations, their greatest beneficiary is always China.

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China unfairly takes advantage of its cooperation with the US to dominate the American market through trade deficits. The Chinese government subsidizes the mass production of goods meant for the US market to increase exports, leading to huge trade deficits between the US and China. Chinese corporations have access to cheap aluminum and steel because their manufacturers receive funding from the government. Goods such as rubber bands, tool cabinets and chests, and steel wheels that China exported to the US in 2018 were all subsidized (Rushe, 2019). According to Rushe (2019), as a result, goods imported to the US from China hit a record of $539.5 billion. In that year, the US only sold goods worth $120.3 billion to China. Hence, there was a trade deficit of $419.2 billion. Also, according to PBS (2012), business partnerships are responsible for shifting manufacturing, which is also responsible for the growing trade deficit between the two countries.

Moreover, China is guilty of stealing intellectual property from the US and using the ideas to make hundreds of billions of dollars each year in the manufacturing business. In March 2019, CNBC conducted a poll, which showed that China stole the intellectual property of one in five American corporations in 2018 alone (Rosenbaum, 2019). The Chinese corporations that steal ideas from US companies pose great competition in the market because of their cheaper production and government capitalism. For example, China's electric car manufacturer called Nio obtained the idea from Tesla, which is currently suffering. Nio managed to grow exponentially because it has been receiving government subsidies. Today the Chinese electric vehicle company would be experiencing similar setbacks as Tesla if China had not bailed it out with $1.5 billion in 2019 (Rosenbaum, 2019). Through its government capitalist policy, China has been giving huge sums in handouts to its companies competing for US corporations.

In conclusion, Chinese business partnerships are not a good deal for US companies. China uses such opportunities to boost its economy while hurting the US through intellectual property theft, erosion of per capita income, and trade deficit. Since China has the advantage of cheaper manufacturing, its products tend to cost less than its competitors made in America. Hence US companies in partnership with Chinese organizations tend to transfer their production to China. The result of this is the loss of employment in America and expanding trade deficit.

References

PBS. (2012, February 17). Are Chinese business partnerships good for U.S. companies? [Video]. PBS.org. https://www.pbs.org/video/pbs-newshour-are-chinese-business-partnerships-good-for-us-companies/

Rosenbaum, E. (2019, March 1). 1 in 5 corporations says China has stolen their IP within the last year: CNBC CFO survey. CNBC. https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-their-ip-within-the-last-year-cnbc.html

Rushe, D. (2019, August 24). Here are the reasons for Trump's economic war with China. the Guardian. https://www.theguardian.com/us-news/2019/aug/23/trump-china-economic-war-why-reasons

Zhu, Z. (2019, June 5). The growing U.S.-China conflict: Why, and now what? The National Interest. https://nationalinterest.org/feature/growing-us-china-conflict-why-and-now-what-61227