China is the country with the largest number of Internet users in the world, and it is also a market where startups and innovative companies thrive. However, China still highly relies on imported core components such as semiconductor chips and aircraft engines.
Kerry Craig, a global market strategist at JPMorgan Asset Management Australia, told CFA reporters: 'Given the current uncertainties in the development of Sino-U.S. trade frictions, the market lacks guidance and may experience further volatility. Although the possibility of friction escalation It's very big, but it's clear that both sides also recognize that there is no winner in the trade war.'
The Trump administration's basic trade war with China is aimed at science and technology and high-end manufacturing. The EU exports a large number of high-tech products and high-tech knowledge-intensive service products each year. The scale is expected to be around 680 billion euros, including exports to China. The scale reached 30 billion euros.
Simon Baptist, chief economist at the Economist Intelligence Unit, told the First Financial reporter: 'The United States took the lead in this round of trade frictions to China, mainly to address intellectual property issues, not even at the expense of trade.'
In this Sino-US trade smoke, Trump is expected to take the opportunity to allow some US companies to relocate their production lines to the United States. These industries are involved in robotics, information technology, communications technology, and aerospace, all of which are important areas for China's industrial upgrading.
According to the latest opinion released by Gavin Parry, managing director of investment service company Parry Global Group, US companies with important businesses in China had previously been pressured by the Trump administration to create more jobs in the United States to stimulate the US economy.
Take Apple Inc. as an example. The components of the Apple iPhone are manufactured and manufactured by multiple countries. For example, the chips are provided by South Korea’s Samsung Electronics and SK Hynix, but most of these components are ultimately manufactured by Apple’s largest foundry Foxconn. Assembled and exported to all parts of the world.
Last year, Foxconn announced that it would invest $10 billion in Daxing LCD panel factory in Wisconsin, and promised to create 13,000 jobs in six years in return for $1.5 billion in local government tax subsidies.
More than 60% of US chip giant Qualcomm’s revenue comes from China. Qualcomm’s acquisition of US$44 billion worth of another chip giant NXP has yet to be approved by China’s antitrust agency because the two companies have a large number of electronics manufacturing customers in China.
China's smart phone manufacturers will also be affected, because domestic mobile phones also have some components, such as semiconductor chips imported from the United States, which will cause more obvious pressure on the cost of mobile phones, thus affecting the overall market of smart phones related manufacturers.
US semiconductor chip makers may become the biggest victims of this round of trade friction in the field of technology. Texas Instruments and Intel's sales in the Chinese market are also between 20% to 30%. Gartner Research Vice President Sheng Linghai of the First Finance The reporter stated: 'The production of large American chip makers is basically in China, and the Chinese market also contributes a large part of these companies' revenue.' Intel’s share price fell by more than 6% in the last 5 days, and Texas Instruments’ share price fell by more than 4 in the last 5 days. %, Nvidia's share price fell more than 7% in the last 5 days.
A study by Credit Suisse last year pointed out that if the United States puts pressure on China in terms of taxation, then the first companies to suffer damages are export-oriented American companies, including sports brands Nike, automotive brands, jewelry brands Tiffany and others. The expansion of Chinese technology companies and communications technology companies in the United States may be hindered.