China’s counter-sanctions against U.S. corporations, which may be taken in response to the actions of the US administration, severely hit the business of these companies, said RIA Novosti news Agency managing the American Fund Principal Investors Kyle Shostak.
Moreover, an event may prevent the implementation of trade deals between the US and China, he adds.
Earlier edition of Global Times, citing its sources said that China is considering to impose very serious sanctions on American companies after the US actions against Huawei. These sanctions may affect such companies as Apple, Boeing, Qualcomm and others.
On Friday, the US Secretary of state Mike Pompeo said that the United States will continue to impose restrictions on the export of American goods for the Chinese company Huawei because of the threat to U.S. national security and global stability.
On the same day it became known that the U.S. Department of Commerce has taken action against the supply of semiconductors from the world’s chip manufacturers, the Chinese company Huawei. In accordance with amendments, foreign companies that use American equipment for the production of chips, will have to obtain a license in the US, before putting some chips of Huawei or such division as HiSilicon.
"Undoubtedly, if the Chinese government decides to counter-sanctions against certain American companies, for them it will be very painful. For example, Boeing strongly depends on the placement of orders for aircraft in China, under the threat of contract for over 100 units. For aircraft manufacturers, and their financial position and it was not entirely safe, loss Chinese order can mean virtually a complete financial collapse and an appeal for state aid", – said Shostak.
According to him, it will hurt both Apple and Qualcomm, whose share of sales in China is 10 to 20% of total sales.
The sanctions will also affect medium and small segment of American business, which is heavily dependent on Chinese suppliers, manufacturers of components or finished products, he adds. In the party will remain a major U.S. investment funds, which have recently been actively increased investment in Chinese securities.
The expert adds that one can only speculate what specific measures will be taken by the Chinese side. Shostak reminds us that the threat of imposition of such sanctions was exaggerated last year in the context of mutual accusations during the negotiations on a new trade agreement, but then further bellicose rhetoric is not reached. "Now the threat is more than real", – he said.
The analyst points out that this threat was obozrenie on the background that the American MPs looking for a culprit in the spread of the pandemic, and the number of PCsatov takes action in the American courts in China for losses arising from the pandemic.
"recent Chinese diplomacy has become much more tougher and there is a departure from the traditional line of soft containment. We see this in the recent statements of senior officials of the foreign Ministry of China. It becomes apparent that China will not tolerate unilateral accusations and has an Arsenal of tough measures pressure in stock" – sums Shostak, adding that what is happening creates an additional hurdle in the implementation of the first phase of a commercial transaction between the US and China.
