Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Companies  >  All News

News : Companies
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors

Industry Hopes for Detente in U.S.-China Trade Spat

share with twitter share with LinkedIn share with facebook
share via e-mail
0
01/25/2019 | 09:36am EDT

By Anupreeta Das and Jamie Heller

DAVOS -- Global business leaders are hoping that the U.S. and China will strike a trade pact soon to calm jittery markets, minimize disruption to their operations and mitigate the impact of an economic slowdown in the Asian country, where they still see plenty of room for growth.

Uncertainty over the trade dispute coursed through conversations at the World Economic Forum in Davos this year. Many executives also said the two countries' tussle for economic and technological supremacy is adding a new layer of unpredictability to their longer-term business outlooks.

"There is the fear that things go bitter and an economic Cold War breaks out between China and the U.S.," said Maurice Levy, chairman of advertising firm Publicis Groupe SA.

Hedge-fund billionaire and philanthropist George Soros on Thursday took direct aim at China, labeling the country's desire to "dictate rules and procedures" governing the digital economy a threat to internet freedom.

China's technological prowess is a "mortal danger facing open societies from the instruments of control that machine learning and artificial intelligence can put in the hands of repressive regimes," Mr. Soros said on the sidelines of the annual event.

The philanthropist called on the Trump administration to crack down on Chinese telecommunications equipment makers ZTE Corp. and Huawei Technologies Co. "If these companies came to dominate the 5G market, they would present an unacceptable security risk for the rest of the world."

Also at Davos, Huawei Chairman Liang Hua pushed back against claims that his company conducts espionage for the Chinese government, telling reporters that it was being unfairly targeted without proof.

Many business and finance executives see the trade dispute as one piece of a broader and longer-lasting fight for technological dominance between the world's largest and second-largest economies, including the race to build the digital infrastructure for 5G networks.

Trade "is not at the core of what's going on," said Michael Sabia, president of Caisse de dépôt et placement du Québec, a Canadian pension fund company. While he expected a compromise on trade, Mr. Sabia characterized U.S.-China relations in the context of an "ascendant power" challenging a dominant one, which over time will "restructure the global economy."

U.S. and Chinese officials are preparing for another round of trade negotiations later this month, having narrowed differences over issues such as purchases of American goods and services in a previous round of talks. Technology is expected to be a key sticking point, and some tech-industry executives said they are seeking clarity on where U.S. tech policy toward China is headed.

"In Washington, D.C., we see a point of view where we don't as a nation want to have more American technology exports to China," said Brad Smith, Microsoft Corp.'s president and chief legal officer. "So as an industry, the tech sector is left wondering a little bit, where is American trade policy towards China going to go?"

Mr. Smith said export controls could stymie the development of new technologies such as quantum computing and artificial intelligence. "We'd like to have broader access to the Chinese market. But that's not going to be possible if there are second thoughts on the part of American policy makers," he said.

The trade fight is exacerbating a slowdown in the Chinese economy, which grew at 6.6% in 2018 -- the slowest pace since 1990. Uncertainty over exports has contributed to slower domestic hiring and softness in manufacturing. Chinese property and retail sales are down.

Lakshmi Mittal, chairman and CEO of steel giant ArcelorMittal, said his company is seeing a slowdown in steel demand from China for both construction and auto-making. He said he understood U.S. efforts to negotiate a "level playing field" in trade with China, but a deal wouldn't resolve some of the longstanding and structural issues that have contributed to giving China an advantage in the global steel market.

Mr. Mittal noted that various kinds of government subsidies are built into the Chinese steel industry, and that Western steel producers are obliged to comply with tougher labor and environmental regulations, which adds to their costs relative to Chinese producers.

While many executives said they were moderately worried that China's slowing growth could spill over into the global economy, they also expect the government to right the ship using fiscal stimulus and other means.

"Historically, they've found ways to solve the problems," said George Oliver, CEO of industrial company Johnson Controls International PLC, which has a large presence in China.

Nestlé SA Chairman Paul Bulcke said he didn't find China's growth slowdown worrisome for the company or the country. "You don't manage a company with that nervousness and anxiety," he said. "We are in the country for the long term and ingrained in the society there." As for the slowdown, he said, "taking a second breath as a country is actually quite healthy" after a run of intense growth.

And the precise figure on growth was less important than the fact that growth continued, said Patricia Russo, Chairman of Hewlett Packard Enterprise Co. "As long as there is a plus in front of it, it's fine."

Write to Anupreeta Das at anupreeta.das@wsj.com and Jamie Heller at jamie.heller@wsj.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Companies"
12:08aALDAR PROPERTIES : Alreeman 2 homes in Abu Dhabi secure $114m in sales
AQ
12:08aEXPOTRADE MIDEAST : UAE real estate appetite driving proptech tools
AQ
12:08aALDAR PROPERTIES : picks Anarock to market Abu Dhabi assets to Indians
AQ
12:08aUBER TECHNOLOGIES : UAE Ministry of Economy approves Uber's takeover of Careem
AQ
12:08aCEVA LOGISTICS : and CMA CGM enhance Thailand and Laos cross-border freight
AQ
12:08aTENCENT : Dubai Internet City HQ for Tencent, part-owner of Fortnite, PUBG
AQ
12:08aALDAR PROPERTIES : Khidmah wins contracts from Abu Dhabi's Aldar, Dubai Municipality
AQ
12:02aXIAOMI : The Potential of Core Blockchain Project SCRY.INFO
AQ
12:02aACCENTURE :  Accenture to Acquire Privately Held BCT Solutions, Bolstering Its Defence, National Security and Public Safety Services in ANZ
BU
12:02aINSPUR : TM Announces 5G Lab Availability in Shanghai
BU
Latest news "Companies"
Advertisement