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Despite trade deficits, China offers business opportunities

On Behalf of | May 8, 2018 | Uncategorized

Despite what the trade deficit may suggest, doing business in China provides significant benefits for American companies. The trade deficit is now at $375 billion. But this deficit does consider the amount of business American companies are doing in China.

For example, more Apple iPhones in use in China than in the United States. General Motors has been selling more cars in China than in America. And American companies sold approximately $223 billion in goods in China.

The reason that the deficit does not reflect such sales is because these goods remain in China. And while such sales are good for American businesses, it also makes companies vulnerable to retaliation by the Chinese government.

Preparing businesses for a rough ride ahead

American businesses can do little to prevent trade disputes. When the American government raises tariffs on Chinese imports, there is a likelihood that China will take measures against American companies as well.

The Chinese government can halt progress on construction projects at any moment. Businesses may also face sanctions for possible violations of local Chinese rules.

Yet it is impossible for American businesses to ignore an overseas market as large as China. If there is an economic downturn in America, it is important to have established trade for businesses in China.

There will always be a number of investment challenges concerning doing business in China. For this reason, having an attorney knowledgeable regarding business practices and Chinese culture is invaluable. A certain amount of business planning can help avoid difficulties from occurring to begin with. And in certain instances, taking proactive steps to prevent difficulties from arising can be the difference between a successful and unsuccessful venture.