What's going on with some of this mixed messaging?
You know, China welcoming foreign direct investment or at least
seemingly welcoming foreign direct investment,
at the same time putting up restrictions on US businesses.
How should investors view this?
Yeah. First of all, I mean this is the national
security view ascendant in Beijing right now
that is driving everything in sectors where they think reliance
on American firms,
software, hardware, anything you talk about
is going to become a national security threat.
They want American companies out,
extricated, gone, where of course they need American technology and
information
and access to the IP in order to ultimately eventually
become lead players in those sectors themselves.
They're going to welcome foreign investment.
That is the paradigm of the framework really
that investors need to fully comprehend and move forward on
the basis of,
you know, that's a really interesting dynamic.
So your word, extricating, they want the US businesses out.
But at the same time,
we just saw Tim Cook on that panel just there
when Eunice was talking and also he was in China
opening up a new Apple Store.
So how do you explain that one of the big
industries in China that they seemingly were trying to protect
was the mobile phone business,
Huawei in particular, but still welcome in a Tim Cook
still opening up new stores.
I mean, explain just it seems like almost a bipolar
view of U.S.
business.
Well, you know, Apple as far as its finished products,
its iPhones as concerns, of course,
having a very tough time in in China given the
local competition and the fact that local companies have gotten
tremendous amount of state subsidies and other support from Beijing.
But at the same time,
Apple is very important to China because it,
you know, has factories in China.
And China, of course is very important to Apple itself
given that supply chain integration that we're talking about.
So that makes sense. I think it goes back to
the same concept that I just described here where China
has an an advantage,
whether it's in terms of jobs or access to technology,
retaining a critical position in the in the supply chain.
It certainly wants those firms there.
Apple is not the only one look at pharmaceuticals.
They want more American pharmaceutical investment and presence in China
rather than less
big national security risk for America.
Of course. New report out that
China's direct foreign or foreign direct investment I should say
fell about 20%
last year down to 30 billion.
I'm going to show you some a number and show
the audience as well.
Mexico on the other hand saw $36 billion
in foreign direct investment pretty much rising about 1%
year over year, but still as you can see a
very strong number.
Is it possibly just things have shifted.
U.S. companies especially want their supply chains that you just
mentioned closer to home.
And the trend is going to just be lower no
matter what China does when it comes to that foreign
investment.
Yeah, look, I think you know,
China's been one of the biggest beneficiaries.
I think of this concept of near shoring,
a French shoring that we're trying to promote here in
America.
Because also what you're seeing by the way,
is a lot of Chinese companies partnering up with plants
in Mexico and opening up plants in Mexico in order
to continue supplying the American market but away from China
so that they can evade the tariffs and the trade
sanctions and so forth.
So that's a trend that may very well continue.
But I think the top line numbers probably hide the
fact that ultimately again it is Chinese companies who are
at least in part benefiting or you know from from
this shift.