The Chinese government has a lot of sway over its people. If it wants its citizens to stop traveling to the U.S. or to quit buying American goods, it can make that happen, says Gerardo Zamorano, director of Brandes Investment Partners’ investments group. When South Korea agreed to host a missile defense system, Korean car companies lost market share in China. In 2016, when people in Hong Kong began protesting for more independence from China, tourism to the country from China dried up. The Chinese government didn’t introduce any new rules banning people from buying cars or visiting Hong Kong, but Chinese citizens stopped supporting these countries anyway.
“There’s no prohibition in place, but the Chinese government says ‘wink wink’ and then tells the state media to make certain comments, and all of a sudden businesses are losing market share,” Zamorano said. “That could happen to McDonald’s or Burger King, symbols of the U.S.”
It could also make it harder for U.S. companies to cash out of China — cash transfers need to be approved and it can slow down that processes, he said. And China can make it more difficult for Americans to get visas, prop up domestic companies financially or it could increase the regulatory burden on American companies, Hooper said. It might tax certain businesses, implement anti-monopoly investigations or institute environmental regulations. “A lot can fall under regulations, which can really slow down U.S. business,” she said.
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