China’s business relations with the US are getting worse

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Departure from China

American businesses have worn out their welcome in China.

US-China relations have been on shaky ground for some time, to put it mildly. But despite the growing animosity, the effort by American corporations to sell things to Chinese consumers has been a middle ground that everyone can agree on. (As always, money is the great equalizer.)

But China’s goal of being less dependent on foreign business and supporting domestic companies is blowing up one of the country’s last good relations with the USwrites Business Insider’s Linette Lopez.

It’s a significant change from decades past when China was the next frontier for American companies. But for American giants like Apple, Starbucks and Nike, China doesn’t offer the same growth opportunities it once did.

One problem is internal competition. Chinese consumers increasingly prefer domestic companies over imports (e.g Huawei over Apple).

But that’s not the only headwind facing U.S. companies. China’s economy, frankly, is not doing very well.

The great pandemic comeback that Wall Street was betting on never materialized. Instead, slowing industrial growth, a volatile housing market and falling consumer demand are putting China in its tracks and at risk of don’t lose sight of your growth goals.

American companies may lose a revenue opportunity, but China is also suffering. As dollars dry up, American companies are less motivated to mediate between Washington and Beijing.

However, China has a massive bargaining chip, literally.

The world’s economic hopes and dreams rely heavily on artificial intelligence. And Taiwan, which China claims, plays a key role in this equation.

Taiwan Semiconductor Manufacturing Company makes critical hardware components for most of the world’s chip companies, including industrial giant Nvidia. So China’s potential invasion of Taiwan, a growing concern, could throw the AI ​​industry into disarray.

Nvidia CEO Jensen Huang recently told his company he has a backup plan if things start up in Taiwan. But he also acknowledged that concessions would be made.

“Maybe the process technology is not as great. Maybe we won’t be able to achieve the same level of performance or cost, but we will be able to provide the supply,” Huang said.

That’s a scary result, given that the AI ​​industry has spent the past few months trying to explain to customers and investors the benefits they’ll get from their expensive investments in the technology.

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The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Jack Sommers, deputy editor, in London. Amanda Yen, colleague, in New York. Grace Lett, publisher, in Chicago. Milan Sehmbi, colleague, in London.