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How does the U.S. relationship with China currently look?

On Behalf of | Apr 30, 2022 | Business Law

These days, more and more hurdles exist when it comes to doing business with China. Costs increase, tariffs remain and the lasting impact of the pandemic has affected business ties in ways no one could see coming.

Despite the challenges of keeping up ties between China and America, it is not impossible to continue business. In fact, it is a perfectly reasonable and attainable goal.

Labor costs and supply networks

Reuters discusses the aspects that cause some companies to return to China or stick with it despite rising tensions. China tends to provide three key points that not many other countries can.

First, they have competitive labor costs. China can manufacture most things at a rate cheaper than other countries, which makes it an attractive option for businesses looking to cut costs.

Next, they have solid supply networks that can provide for virtually any industry you could think of. No matter what products a business needs, China likely has them.

A large domestic market

Finally, they have a large and thriving domestic market with a middle class that is on its way to increased and continued growth. This makes them a huge player in money making, and makes them a very coveted audience for a business to sell to.

The trade war forced many companies to move away from China in 2018 out of necessity. Though the political climate did improve over time, many of the financial hurdles and issues related to social climate persist to this day.

It is essentially up to every business individually to decide if the benefits Chinese partnerships offer outweigh the potential downsides.