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Shift from US products likely in China as trade war heats up

Reuters / Share:
Vendor Zhao Baoxin, 61, speaks during a street interview on the US-China trade war at his shop in Beijing, China. Reuters

BEIJING/SHANGHAI, (Reuters) – Chinese officials have been mostly measured and moderate in their response to US President Donald Trump’s ratcheting up of a trade war with Beijing in recent weeks through his announcement of a series of punitive tariffs. They have generally avoided adding to tensions, allowing the Communist Party’s official media to make the most bellicose comments.

But the mood on the streets of Beijing and Shanghai is a little less accepting. Reuters talked to a cross section of 50 people, mainly from the two cities, about how concerned they are about the trade war, what they think Beijing’s response would be, and whether they think Chinese people should boycott American products in retaliation.

The interviews showed there is no palpable sense of crisis or panic yet. There is division and confusion over how China should respond to Mr Trump, with some arguing that Beijing should strike back at American interests but others saying they didn’t know what could be done.

But perhaps most worrying for American businesses selling in China, a significant minority of the people interviewed – 14, or 28 percent – want to stop buying American products now, and some say they are already boycotting anything made in the US. Others said they would continue to buy American but that could change in the future.

If that was representative of the whole of China – and words were turned into action – it might start to put a dent in sales of Apple’s iPhones, Disney’s movies, Starbucks’ drinks and General Motors’ cars, among other American products – and that’s without any boycott being organized by the government or activists.

A decade after China basked in the patriotic glory of an inspirational opening ceremony for the Beijing Olympics, nationalist sentiment is rarely far below the surface.

The straw poll’s sample is very small and clearly not scientific. The interviews were also conducted in a country where people are often guarded and may well not let foreign media know their real views. Any individual’s comments deemed inappropriate – criticism of Mr Xi would fall into this category – could lead to trouble with the authorities.

But the views expressed in the 50 interviews are more than the basis for idle curiosity.

Here are the results of the straw poll:

Asked whether they were worried about the trade war, only 11 of the 50 (22 percent) said they were, and 39 (or 78 percent) said they weren’t concerned.

Asked what Beijing should do in response to Mr Trump’s punitive tariffs, 19 (or 38 percent) said that it should strike back hard. The rest came up with various responses, including a refocus on development of the domestic economy, building other export markets, while 8 (or 16 percent) said they had no idea what the government should do.

Asked whether they would stop buying US products, 14 said they would, 31 said they wouldn’t (some indicated their views could change if the trade war intensifies), and five didn’t have a view.

“Of course I’m concerned. It’s a clash between the largest and second-largest economy,” said Shanghai stockbroker Cai Qing, 40. “None of the relevant parties were fully prepared for the trade war. Policies were rushed, including US policies,” he added.

“To put it bluntly, Americans have always been so arrogant – they make everyone their manufacturer so they can reap the economic fruit,” said Qu Xinjun, who works in the steel industry in Shanghai.

“Mr Trump is waging a psychological war with China. He was trying to intimidate China. From a psychological standpoint, we should not worry about the trade war, but rather focus on domestic development,” he said. “We should trust our country and the leadership and trust that we can win the war.”

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