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2024-10-17 18:05阅读：
Breaking Up With China Is Hard to Do
By Peter Coy
It’s not an easy time to be an American multinational company that
sells to or buys from China. As the governments of the United
States and China butt heads, they’re pressuring companies to take
sides.
Look at Ford. In January, the heads of two congressional committees
asked the Biden administration to investigate four Chinese
companies that they said were involved in Ford’s planned battery
factory in Michigan. The committee chairs claimed that the
companies had ties to the Chinese military, the Communist Party,
the North Korean government and human rights abuses in China’s
Xinjiang region.
Or look at Apple. As this newspaper has reported, “For years, Apple
has bowed to Beijing’
s demands that it block an array of apps, including newspapers,
VPNs and encrypted messaging services.” Apple “also built a data
center in the country to house Chinese citizens’ iCloud
information, which includes personal contacts, photos and email,”
The Times wrote.
The two companies — which once saw business with China as a major
bright spot — are repeatedly forced to scramble to explain. Ford,
for example, told Reuters it follows U.S. government regulations
“across our business.” Apple C.E.O. Tim Cook talks up the company’s
Americanness: “I know that a company like Apple could only come
from America — and we are as committed as ever to giving back to
our great country,” he said in Arizona in 2022.
An analysis released Monday by Strategy Risks, a 12-person business
intelligence company focused on relations with China, lists Ford
first and Apple third in a ranking of exposure to China among the
250 biggest publicly traded firms in the United States. (Second on
the list is Carrier Global, the heating, ventilating and
air-conditioning company.) Other analysts might rank the companies
lower. You could make a case that Tesla, ranked fourth by Strategy
Risks, is more exposed than Ford, Carrier or Apple. But the
publication of the list nonetheless invites a look at the China
strategies of two of America’s most famous companies.
The question that bedevils American C.E.O.s is how close to get to
Chinese frenemies: companies that can be both friends as partners
and enemies as competitors. The Chinese market is lucrative, but
American companies that have entered it have given the Chinese
valuable intellectual property — sometimes willingly, sometimes
not.
As Chinese companies have caught up and in some cases surpassed
American companies in technology, the new question for the American
ones is whether to attempt to fight their way back to the
forefront, at great cost, or cede the market to the Chinese and
become their customers.
That’s the dilemma these days for Jim Farley, who has been the
chief executive of Ford since 2020. The Wall Street Journal
reported this month that Farley returned from a China trip in May
amazed by Chinese companies’ progress in electric vehicles, telling
a fellow Ford board member that “this is an existential
threat.”
Ford has predicted it will lose around $5 billion on its electric
vehicle operations in 2024. That’s in spite of high tariffs that
block Chinese E.V.’s from the American market. In August Ford
announced it was pulling the plug on an all-electric, three-row
sport utility vehicle and delaying the rollout of a large electric
pickup truck by about 18 months, to 2027.
Farley is steering a middle course with regard to China. Ford is
taking subsidies from the U.S. government to make batteries in
Michigan. But it’s licensing technology for them from China’s
C.A.T.L., the world’s largest maker of E.V. batteries. That amounts
to an acknowledgment of Chinese technological leadership, coupled
with a commitment to in-house manufacturing.
Farley’s latest tactic for keeping up with Chinese competition is
setting up a new operation in the Los Angeles area to design
electric vehicles that will be entirely new from the pavement up,
built around those new batteries.
It might work, or it might not. Some Wall Street analysts are
skeptical. “Focus on your core,” John Murphy, a Bank of America
analyst, said in a talk in June. He said Ford, General Motors and
Stellantis, the parent of Chrysler, should focus on selling
gasoline-powered trucks in North America, which remain highly
profitable, while “ultimately investing in autonomous connected and
electric vehicles over time.” (Ford says its Chinese operations
have turned profitable.)
Apple, though still widely admired in China, is losing market share
in smartphones and encountering political headwinds. While Apple
has tried to remain in the good graces of the government, Chinese
agencies and government-backed firms have banned their employees
from bringing iPhones and other foreign devices to work. Jon
Stewart’s show on Apple’s streaming service ended last year partly
because potential show topics related to China and artificial
intelligence were causing concern among Apple executives, The Times
reported.
Apple has made moves to reduce its reliance on Chinese sources for
parts but has made little progress. Nikkei Asia reported in April
that Apple increased its use of parts from China-headquartered
suppliers and Chinese manufacturing sites in 2023, while using
fewer suppliers from Taiwan, the United States, Japan and South
Korea. Apple said in March that it was expanding a research center
in Shanghai and opening a new lab in Shenzhen, the tech hub near
Hong Kong.
“Everyone has the same dilemma” of fearing over-dependence on China
but also worrying about becoming uncompetitive if they pull out,
James Andrew Lewis, a senior vice president at the Center for
Strategic and International Studies, told me. “People are hedging
their bets.”
“It would take Apple a decade to get out of China” even if it
wanted to, Jeff Fieldhack, a research director for Counterpoint
Research, told me. “It’s not just the building of devices. It’s the
huge ecosystem of components.”
An Apple spokesman declined to discuss the company’s exposure to
China. The company says it designs all its products in California
and has more than 90,000 employees in the United States, versus
about 16,000 in “Greater China,” which for Apple includes
Taiwan.
If tensions between China and the United States continue to ratchet
up, the pressure on companies that straddle the two markets will
only intensify. There is no easy way out.
Elsewhere: The Fruits of a High Minimum Wage
California’s $20 minimum wage for workers in big fast-food chains
“increased average hourly pay by a remarkable 18 percent, and yet
did not reduce employment,” according to a new working paper by the
economists Michael Reich of the University of California, Berkeley,
and Denis Sosinskiy of the University of California, Davis. The
policy increased prices about 3.7 percent, “contrary to industry
claims of larger increases,” they estimated. Profit margins of
restaurants were above competitive levels before the policy and
absorbed “a substantial share” of the increased expense on wages,
they calculated. Franchise owners pay a fixed percentage of their
revenue in royalties to their parent companies, so when they raised
prices, the parent companies got more money that went straight to
the bottom line.
I asked Michael Strain, an economist who has debated Reich on
minimum wages in print, what he thought of the research. He said
some of the lowest-skilled workers might be fired and replaced by
higher-skilled workers who would be attracted by the higher pay.
Also, he said fast-food workers eat at the restaurants where prices
rose, so “you’re kind of giving a pay boost to workers with your
right hand and you’re taking a bunch of it back with your left
hand.”
Quote of the Day
“The stock market, which is a sort of horse track without the
horses, does not deserve its wide reputation as a barometer. It
sometimes sows the hurricane, instead of reporting the
breeze.”
— E.B. White, “Stock Market Zigzags,” The New Yorker, March 26,
1955, collected in “E.B. White: Writings from The New Yorker
1925-1976” (1990)
