Despite talks that Foxconn could abandon Zhengzhou, there have been recent signs that the situation may be improving.
The electronics manufacturing giant brought in around 50,000 workers in its latest hiring spree in August. It also promised to invest 1 billion yuan (US$137 million) to build a new business headquarters in the city.
Foxconn did not respond to CNA’s request for comments on its Zhengzhou strategy.
TRUMP AND TARIFFS
Trump’s tariffs pose a significant threat not only to the city’s economy, but also to the livelihoods of countless workers who rely on those industries. The ripple effects extend to the communities where these workers live, potentially disrupting local economies and social stability.
Furthermore, the impact of Trump’s trade policy on China will be felt beyond its technology sector, said businesses.
For instance, Jungle Tiger, a Zhengzhou-based company that sells outdoor adventure equipment such as camping tents, tarps, and cookware, is worried it may be affected.
The company’s products are listed on e-commerce platforms like Alibaba and exported to overseas customers.
Its founder Zhang Gaofeng said the firm started selling to the US in 2018, and managed to buck the trend in Trump’s first term because it mainly targets the high-end market.
The firm exports primarily to Europe and America, with the US being its largest market, accounting for about 40 per cent of its exports.
Still, Zhang said he is not putting all his eggs in one basket, especially after Trump’s threats to slap further tariffs on Chinese products.
“We are already entering markets in the Middle East and Southeast Asia. The Middle East accounts for 20 per cent of our sales,” he added.
“As US policies evolve, we are diversifying our market focus. We are also exploring Russia due to its potential and strategic relations with China.”
Experts said many businesses still need to source materials or components from China.
“Redirecting investment to Vietnam, to India, is not as rosy. The business environment may not be able even to compare with Zhengzhou,” said Liu Baocheng, director of the Center for International Business Ethics at the University of International Business and Economics.
“The fundamental issue is that China has a very strong industrial cluster. For some of the small gadgets or components, you still need to source within mainland China.”
Chinese President Xi Jinping recently reaffirmed China’s commitment to further open up its economy and align itself with international trade rules, warning that trade wars produce no winners.
But whether that is enough to convince Trump that China is in for fair trade remains to be seen, said observers.
