What’s Ahead for China Inc. Under Trump 2.0?

By Doug Young & Rene Vanguestaine
As Donald Trump returns to the White House, the landscape of US-China business and technological relations stands at a critical juncture. Having closely followed these developments, we see three key areas that deserve particular attention: Chinese tech companies’ presence in the U.S. market, export controls, and the future of Chinese IPOs in America.
Social media and e-commerce: the Tik Tok paradox
The TikTok saga perhaps best exemplifies the complexity of the situation. With Trump’s unexpected indication of a 90-day reprieve for the platform, which serves approximately 170 million U.S. users, we’re witnessing a departure from both his own first-term policies and the Biden administration’s recent Supreme Court-endorsed ban. However, the fundamental national security concerns that initially prompted scrutiny of TikTok remain unaddressed, and Trump’s true intentions remain unclear. The platform’s future may hinge on finding a solution that addresses concerns about potential Chinese government influence while preserving its massive U.S. user base.
For e-commerce players like Shein and Temu, the outlook appears less ambiguous. The recent repeal of their tax-free import privileges under Biden is unlikely to be reversed, aligning with Trump’s historically tough stance on trade with China. These companies will likely continue operating under the same stringent conditions facing all international retailers, marking a significant shift from their initial advantageous position in the U.S. market.
Technology and national security: the export control battleground
Regarding export controls, particularly in semiconductors and AI technology, we should expect continued stringency. The strong bipartisan consensus on protecting sensitive technologies suggests that Trump will maintain, if not intensify, current restrictions. This approach reflects growing concerns about China’s technological advancement and its implications for national security.
The automotive sector presents another fascinating case study. Electric vehicles from China will likely face substantial barriers, with Trump having already signaled intentions to impose hefty tariffs, even on vehicles entering through Mexico. Recent developments in autonomous driving technology further complicate the picture, with the Biden administration’s ban on Chinese autonomous driving software likely to persist under Trump. These restrictions echo earlier concerns about Chinese drones, particularly DJI products, which were banned from military use due to data security concerns.
Capital markets: the Evolving IPO Landscape
The landscape for Chinese IPOs in U.S. markets presents a mixed picture. While U.S. markets traditionally offered tech companies the highest valuations, recent years have seen mounting challenges for Chinese listings. Although audit access issues have largely been resolved, significant hurdles remain. The U.S. maintains strict restrictions on providing capital for China’s advanced technology development, while Chinese authorities continue to protect data-sensitive sectors from foreign listing. Traditional consumer goods companies might find opportunities, since this sector is fairly non-controversial from the standpoint of both China and the U.S.
But on the other hand, consumer-focused companies show a marked preference for Hong Kong listings. One of the last major Chinese consumer companies to list in the U.S. was Luckin Coffee, and although smaller listings have followed, Hong Kong continues to be the preferred destination for consumer-sector IPOs.
Looking ahead: implications and expectations
We believe the next four years will likely see a continuation of restricted technological exchange between the two nations, even if certain sectors might find limited openings. The fundamental tensions around national security, data privacy, and technological competition appear set to persist, regardless of any potential relaxing of restrictions in other areas.
About China Inc
China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for investors and others interested in this dynamic group of companies.
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