As a new year begins, Americans are having second thoughts over China’s expanded global role after its recent saber-rattling, President Xi Jinping’s creeping authoritarianism and the country’s questionable COVID-19 policies. With global companies now preparing themselves for an uncertain year, the I&I/TIPP Poll asked Americans whether U.S. businesses should be pulling back from China. The answer: a resounding “yes.”
Specifically, I&I/TIPP asked Americans whether they agreed or disagreed with the following statement: “American companies should do more to stand up to China, even if it hurts their businesses.” The online poll of 1,351 adults was taken nationwide from Dec. 7-9, with a +/-2.8 percentage point margin of error.
Sentiment was strong across the board, even among different political factions. Overall, 69% agreed American businesses should do more to stand up to China, even if they’re hurt by doing so. Just 16% disagreed, while 15% called themselves unsure.
The I&I/TIPP data often show stark political differences among the major parties on questions. But not this one.
Among Democrats, 71% agreed, joining a roughly equal 73% of Republicans and 65% of independents. Just 16% of Democrats, 15% of Republicans, and 19% of independents disagreed.
Most demographic groups, likewise, showed strong agreement. But there were some surprises.
It might seem logical that investors and wealthier Americans, recognizing the economic costs of disengaging from China (the country holds just under $1 trillion in U.S. federal debt, after all), would be less likely to support anything that might hurt profits, prices or investments. But that would be wrong.
Indeed, the higher the income, the more support for “standing up” to China grew. Among those earning less than $30,000 a year, agreement was 62%; for those in the $30,000-$50,000 range, it was 71%; those in the $50,000-$75,000 zone, 74%; and for those over $75,000 a year, it was 75%.
As for investors, 81% of those with money on the table agreed, versus non-investors at about 65%.
The point is, there’s a strong sentiment across the board for backing away from our former robust presence in China’s economy. And U.S. companies are already doing it.
Whether the trend gathers pace will depend largely on China’s future policies under communist hardliner Xi Jinping. So far, the outlook is not promising.
China has used its $300-billion-plus yearly trade surpluses from the U.S. to build a 2 million man military and blue-water navy capable of projecting Chinese might around the Pacific. Its neighbors, including South Korea, Japan, the Philippines, Thailand, Vietnam, Singapore, Indonesia, Australia and New Zealand have been put on notice.
That threat has been underscored by recent alarming reports from the Defense Department and others of China’s plans to become a global “nuclear superpower.” Its construction of aircraft carriers and its new H-20 stealth bomber, are similarly of concern.
But there’s more than just a military concern. The “standing up” to China in our question presupposes that Beijing, in addition to violating international norms in how it treats its own citizens, has been bending the rules of international trade, investment and intellectual property for decades with very little pushback.
For the longest time, foreign companies assumed that producing in China was a slam-dunk win, with ultra-low costs, a captive workforce, and 1.2 billion potential domestic consumers. China’s cheap and plentiful production of goods and services played a large part in keeping U.S. inflation near 2% from the 1990s until 2020.
No longer. Like it or not, U.S. companies are part of America’s increasingly hard line against China’s communist regime.
Apple, for instance, has confirmed that it’s diversifying its Chinese operations to friendlier neighbors such as India and Vietnam.
“While the move has been planned for months, after shifting COVID-19 policies enacted by the Chinese Communist Party first began to threaten production earlier this year, sources told the Journal that recent uprisings at the Zhengzhou plant are propelling Apple into action,” Business Insider reported.
Meanwhile, Taiwan Semiconductor, the largest chipmaker in the world, is now building a state-of-the-art plant in Arizona as threats of a Taiwan-takeover by mainland China grow.
Others are also moving to reduce their investment exposure in China. COVID problems helped accelerate the trend in recent years, with Apple’s Taiwan-based supplier Foxconn moving some operations to India, toymaker Hasbro moving factories to Vietnam and India, and Nintendo relocating some operations across Southeast Asia.
They’re not alone. A mid-2022 survey by the American Chamber of Commerce in China found:
- “More than half of the businesses surveyed had already reduced or delayed investments in the country.”
- “The majority of companies reported reduced production capabilities due to a lack of supplies and manpower, as well as the uncertainty of government-issued lockdowns.”
- “The respondents also project reduced revenues for the year.”
In 2021, the State Department outlined the increasing troubles faced by U.S. companies in China, among them: (O)wnership caps and requirements to form joint venture partnerships with local Chinese firms, industrial policies such as Made in China 2025 … as well as pressure on U.S. firms to transfer technology as a prerequisite to gaining market access … (And) an increasingly assertive Chinese Communist Party and emphasis on national companies and self-reliance has heightened foreign investors’ concerns about the pace of economic reforms.”
Similarly, China’s mistreatment of, and human rights denial for, religious groups and non-Han ethnic minorities have raised serious questions about its attempts at becoming a global leader. As the I&I/TIPP poll shows, if American companies reduce their exposure to China in 2023, they’ll get little pushback from the American public.
I&I/TIPP publishes timely, unique and informative data each month on topics of interest. TIPP’s reputation for polling excellence comes from being the most accurate pollster for the past five presidential elections.
Terry Jones is an editor of Issues & Insights. His four decades of journalism experience include serving as national issues editor, economics editor, and editorial page editor for Investor’s Business Daily.
Using these vague “policy violations,” Google is now threatening to demonetize us. It’s part of Big Tech’s effort to silence conservative voices.
China is a convenient scapegoat. China was invaded and treated brutally by Japan in the 1940s, so developing a strong military to deter future aggression makes perfect sense. Before that China was brutally bullied and had territory seized and occupied by Britain, France and the USA. Indeed, USA families like the Bushes and Lodges got rich acting as British proxies in weakening China via the Opium Wars (for which China is seemingly getting revenge via the Mexican cartels’ fentanyl smuggling across the USA’s southern Open Border). Having a strong military-industrial complex is what the USA does, despite the only major invasion being non-military across the Open Border with Mexico. Of course, just as the USA routinely invades nations around the world, it makes sense to guard against China doing the same.
As to human rights, better to point the finger at China. Versus looking at the USA, where government and big tech collude to suppress free speech, impose cancel culture, deny people livelihoods for not conforming to government narratives, hold elections rife with varying kinds and degrees of fraud, etc. Indeed, hand-counting and auditing elections, once allowed, have now been canceled in the USA. The USA should be more focused on the 2022 election challenges in Maricopa County, Arizona rather than pointing the finger at China. But government and media collude in the USA to divert attention. And if the ruling party Democrats claim that the USA is systemically racist is accepted as true, then the USA has absolutely no moral standing to chastise China or any other nation on human rights. Too much USA dissonance and corruption for my taste. Anyway, just goes to show, you can fool 70% of the USA population rather easily.
How’s the weather in Xian today, Joel?
While I’m reading that some companies have reduced their involvement in China I am not seeing that in products. It would be more insightful to include the types of companies who say they are reducing their involvement and if those types are actually returning to the US or just relocating to a cheaper foreign venue.
All disengagement with China is long term positive. China, as shown by their long term efforts to steal our technology, relies on the US and other countries for it’s survival. Shamefully, US companies put profit, that is greed, folks, ahead of our country. Send all those greedy folks on a one way ticket to China. China looks great from a distance but is corrupt and evil up close. Maybe a dose of reality will help set things right.