US Global Producers Seeks China Alternatives As A Change Of Course

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Over the past two decades, China has been considered the world’s premier fast-growing, future-oriented economy, attracting a stampede of U.S. businesses that built factories there, including Iowa-based Vermeer, a 4,000-employee maker of industrial and farm machinery, which opened a plant in the country. However, the mood of Vermeer, as well as many other global producers, has turned sour on China.


While pleased with the operation in China, Jason Andringa, the company’s president and CEO, indicated that the tensions in the U.S.-China relationship are more likely than not to escalate, making it increasingly difficult to find employees and receive fair treatment in a country that is now mutually antagonistic with the U.S. Andringa stated that if they didn’t already have a plant in China, they certainly wouldn’t start one now, and he has no plans to expand there.


The latest example of the increasing tension between the U.S. and China hit Tuesday when the Biden administration announced its plans to halt shipments to China of more advanced artificial intelligence chips designed by Nvidia and others. The move is aimed at curbing Beijing’s access to cutting-edge technology that could be used in weapons. In response, surveys show U.S. business leaders are eager to cut back their China exposure and are shifting investment to other, friendlier countries. This is a radical shift from the days when offshoring production to China was rewarded by Wall Street and investor calls often highlighted multi-million-dollar expansions in the world’s second-largest economy.


According to the U.S. Bureau of Economic Analysis, Mexico has surpassed China as the top destination for foreign direct investment by U.S. firms. Additionally, a survey from the U.S.-China Business Council shows a growing number of U.S. firms pulling back on their China investments. While Vermeer has no plans to leave China, the company’s CEO’s concerns over the U.S.-China relationship are shared by many other business leaders, leading to a shift in investment from China to other countries.

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