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Straits Times
3 days ago
- Business
- Straits Times
US, Chinese officials exchange barbs at Shanghai event over trade
Eric Zhang, President of American Chamber of Commerce in Shanghai (AmCham Shanghai), speaks during AmCham Shanghai annual gala in Shanghai, China June 6, 2025. REUTERS/Go Nakamura Scott Walker, U.S. Consul General in Shanghai, speaks during American Camber of Commerce Shanghai (AmCham Shanghai) annual gala in Shanghai, China June 6, 2025. REUTERS/Go Nakamura SHANGHAI - U.S. and Chinese officials traded barbs at a celebration held by a U.S. business chamber in Shanghai on Friday, as the chamber appealed to both countries to provide more certainty to American businesses operating in China. Scott Walker, consul general of U.S. consulate in Shanghai, told a gathering of U.S. businesses aimed at celebrating the 110th anniversary of the American Chamber of Commerce (AmCham) in Shanghai that the U.S.-China economic relationship had been unbalanced and non-reciprocal "for far too long." "We want an end to discriminatory actions and retaliation against U.S. companies in China," he said. In a speech that directly followed Walker's, Chen Jing, a Shanghai Communist Party official who is also the president of the Shanghai People's Association for Friendship with Foreign Countries, countered Walker's view. "I believe the consul general's view is prejudiced, ungrounded and not aligning with the phone call of our heads of states last night," he said. The interaction reflects the continued strained relationship between both countries as the trade war continues to simmer. U.S. President Donald Trump and Chinese leader Xi Jinping spoke over a long anticipated call on Thursday, confronting weeks of brewing trade tensions and a battle over critical minerals. Trump later said they agreed to further talks. It came in the middle of a dispute between Washington and Beijing in recent weeks over "rare earths" minerals that threatened to tear up a fragile truce in the trade war between the two biggest economies. The countries struck a 90-day deal on May 12 to roll back some of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump's January inauguration but the deal has not addressed broader concerns that strain the relationship and Trump has accused China of violating the agreement. Eric Zheng, president of AmCham Shanghai which counts over 1,000 companies among its membership, told reporters on the sidelines of the event that many companies had put their decision-making on pause due to the uncertainty. "People are looking for some more definitive, durable statements on both sides that enable businesses to feel more secure," he said. "Our number one ask from the two governments is to give us some certainty so that we can plan accordingly." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
28-05-2025
- Business
- Straits Times
Smoke still rising one day after deadly China chemical plant blast
Damaged windows are seen near the site of the chemical plant explosion in Gaomi, Shandong province, China May 28, 2025. REUTERS/Go Nakamura A police car and fire trucks are parked near the site of the chemical plant explosion in Gaomi, Shandong province, China May 28, 2025. REUTERS/Go Nakamura Smoke rises at the site of the chemical plant explosion in Gaomi, Shandong province, China May 28, 2025. REUTERS/Go Nakamura GAOMI, China - Shattered glass from windows blown apart by an explosion at a chemical plant in China's eastern Shandong province littered the roadside for more than one kilometre on Wednesday, a day after a blast that killed at least five people. The explosion happened just before noon on Tuesday at a facility operated by Shandong Youdao Chemical in the city of Gaomi, sending plumes of orange and black smoke into the sky. Nineteen people were injured and six more remain missing, according to the state-run Xinhua news agency. Local officials have not yet released the results of unspecified tests carried out at the site. The streets leading up to the smouldering ruins were deserted, except for emergency teams, Reuters' witnesses reported. Black and grey smoke was still rising from the facility, although there was no sign of a fire that national-level authorities on Tuesday had urged emergency workers to quickly contain. Shandong Youdao Chemical was established in August 2019 in the Gaomi Renhe chemical park, according to the company's website. The plant develops and produces chemical components for use in pesticides and pharmaceuticals, employing more than 300 people on a site of more than 47 hectares (116 acres). The company is a unit of Himile Group, which also owns listed Himile Mechanical, whose shares were down nearly 3.6% when the market closed on Tuesday. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
The Star
20-05-2025
- Business
- The Star
Tax refund policies spur inbound tourism
People walk on a street with food shops during the five-day Labour Day holiday in Shanghai, China, May 4, 2025. REUTERS/Go Nakamura BEIJING: China witnessed a vibrant surge in inbound tourist spending during the recent May Day holiday as more foreign visitors flocked to attractions and left with full shopping bags, driven by the country's recently optimised tax refund policies. Central bank data revealed that the number of transactions made by inbound visitors and processed through card payment giant China UnionPay or NetsUnion Clearing Corp, a Chinese online payment clearing house, increased nearly 245% over the five-day holiday, with the total transaction value up over 128% year-on-year. On mobile platforms, popular Chinese payment app Alipay reported a 180% rise in inbound tourist spending between May 1 and 3, while WeChat Pay recorded nearly triple overseas user transaction volume and value figures in the Chinese mainland compared to the same period last year. This rise in inbound consumption is the fruit of China's latest push to encourage foreign tourist spending. China is also accelerating its development of international consumption centre cities to stimulate inbound spending further. — Xinhua/ANN
Straits Times
12-05-2025
- Business
- Straits Times
This US-owned factory in China made toys bound for Walmart. Tariffs put it on life support
An employee of Shaoguan Guanghua Plastic & Hardware Products Co., Ltd removes excess plastic from toy parts which came out of the automatic plastic injection molding machine in the factory in Shaoguan, Guangdong province, China May 9, 2025. REUTERS/Go Nakamura Buildings of Shaoguan Guanghua Plastic & Hardware Products Co., Ltd are pictured in Shaoguan, Guangdong province, China May 9, 2025. REUTERS/Go Nakamura CEO Jason Cheung of toy manufacturer Huntar Company Inc poses at his U.S. office in Union City, California, U.S. May 8, 2025. REUTERS/Brittany Hosea-Small Employees of Shaoguan Guanghua Plastic & Hardware Products Co., Ltd work to assemble toy parts in the factory in Shaoguan, Guangdong province, China May 9, 2025. REUTERS/Go Nakamura Employees of Shaoguan Guanghua Plastic & Hardware Products Co., Ltd spray paint on toy parts in the factory in Shaoguan, Guangdong province, China May 9, 2025. REUTERS/Go Nakamura This US-owned factory in China made toys bound for Walmart. Tariffs put it on life support The emails started pouring in on April 9, the day President Donald Trump's 145% tariff on Chinese imports took effect. Clients were canceling orders for toys from Huntar Company Inc.'s factory in Guangdong Province, China. But Huntar CEO Jason Cheung, 45, had already halted production at the 600,000-square-foot facility in Shaoguan. He saw the tariff for what it was: an existential threat to his company, which manufactures educational toys bound for the shelves of Walmart and Target, like Learning Resources Inc's Numberblocks, which help teach kids math. 'I needed to start saving money as soon as possible,' Cheung said. In the four weeks since, he has cut production by 60% to 70%, laid off a third of the factory's 400 Chinese workers, and reduced hours and wages to those still employed. Now, he's pursuing a frantic, long-shot effort to move his operation to Vietnam before the company his dad founded 42 years ago runs out of money. He figures he has about a month. Huntar's plight typifies a crisis facing countless factories in China, where about 80% of toys sold in the U.S. are manufactured, according to trade group The Toy Association. New orders have fallen sharply amid a brutal trade war with the United States that threatens to devastate the sector in both countries. Huntar is also unique in one key way: based in the U.S., it straddles both sides of the trade war. On paper, Cheung is Trump's bogeyman, the Chinese factory owner taking American jobs. But he's also the U.S. small business owner tariffs were meant to protect. He's the American son of a Chinese immigrant, running a second-generation family-owned business that employs 15 people in the U.S. - people who would lose their jobs if Huntar falters. Trump has said tariffs will incentivize companies to reshore manufacturing, or, at least, drive it out of China. Huntar illustrates why economists say that's unlikely: a dearth of facilities and workers with toy making expertise in other countries; heavy equipment that's hard to move and would cost millions of dollars to replace; and, most acutely, no time to solve those hurdles before coffers run dry. More likely, factories like Cheung's will simply shut down, a prospect that drove Beijing to the negotiating table with U.S. officials in Geneva over the weekend, three sources familiar with the Chinese government's thinking told Reuters. Realistically, China cannot replace U.S. market demand for product categories like toys, furniture, and textiles, which are already feeling the impact of tariffs, one of the officials said. As trade talks began, Trump signaled he was open to cutting China tariffs to 80%. That wouldn't help Huntar, Cheung says, noting that any tariff rate over about 50% will make survival difficult. On a practical level, there's no difference between 80% and the 145% tariffs he's currently facing. Crises have hit Huntar before, Cheung says, but not like this. The 2008 recession brought a steady slowdown, one he could plan around. And the COVID pandemic dealt a blow, but his volume of production remained high enough to keep him afloat through a temporary slump. This time, he says, 'our manufacturing business essentially halted overnight.' Cheung is starting to feel like his only hope is just that - hope. 'I refresh my 'tariff' Google search five or six times a day, hoping something's changed,' he says. A DREAM AND A LUCKY DESK Huntar manufactures toys for U.S., Canadian and European sellers, like Learning Resources Inc and Play-a-Maze, which distribute them to retailers or sell directly to consumers. It also makes its own educational toys under its Popular Playthings brand, which it has had to stop shipping to the U.S., costing the company hundreds of thousands of dollars so far, Cheung estimates. American-owned factories in China are uncommon, as Chinese law makes it difficult and costly for foreign entities to own them, says attorney Dan Harris, a partner at Harris Sliwoski who focuses on international manufacturing law. But Huntar has roots in a business Cheung's father set up in 1983, a few years after escaping communist China and settling in California's Bay Area. Cheung grew up in San Francisco's Inner Richmond district, he says, in a small house whose broken door you could simply kick open. His father would sell clothes and furniture at a flea market to augment his janitor's wages, with Cheung tagging along, bored to tears. As the operation matured, Cheung's father set up a factory in China, to exert more control over quality. Cheung, who joined the company in 2004, still uses the desk his father set up in their living room decades ago. 'We think maybe it's lucky or something,' he says. The last few weeks have been anything but lucky. The factory is sitting on $750,000 in canceled shipments - value Cheung couldn't fully recover even if the trade war ended, because his shipping costs would surely spike as factories raced to clear backlogs. That's what happened after COVID, Cheung recalls, when shipping costs ballooned from $2,000 per container to more than $20,000. 'They don't deserve this,' said Rick Woldenberg, CEO of toy company Learning Resources, and a client of Cheung's since his father was in charge more than 20 years ago. Woldenberg has canceled future production in China, saying his annual tariffs would jump from $2 million to $100 million. 'It's not who we want to be,' Woldenberg said, 'but they know we have no choice.' According to an April survey by the Toy Association, more than 45% of small and mid-sized toy companies in the U.S. say China tariffs will put them out of business within weeks or months. Learning Resources, which employs 500 people in the U.S. and manufactures 60% of its products in China, has sued the U.S. government, asking a federal judge to stop tariffs from taking effect. "If nothing changes, we'll be crippled," Woldenberg said. 'CANNIBALIZE MYSELF' Cheung has been scouring his contact list, calling factories in Vietnam in hopes of finding a new home for Huntar. Moving to the U.S. is out of the question. Wages here are so high that manufacturing stateside would be even more expensive than staying in China and absorbing the tariffs, Cheung says. Even in Vietnam, financial and logistical hurdles are proving too tall. Few factories have enough space to handle his operation, and competition is high among others looking to move. Even if he found a good spot, Cheung would have to train a new staff and run safety and quality control checks that could easily take months. There's also the question of infrastructure. Cheung's factory is solar-powered, helping ensure profitability in a thin-margin business. It has specific HVAC and wastewater systems designed to negate the environmental risks of spray paint and chemicals used to decorate toys. And it owns more than 30 injection machines, each weighing several tons, which craft toys by pumping molten plastic to steel casings. These likely can't be moved, and Cheung says he's not sure where he'd find the money - well over $1 million - to buy new ones. A more realistic move would be to outsource certain operations and shutter others. Cheung could cut losses by finding a Vietnamese factory to take Huntar's Popular Playthings proprietary line, while ditching the business of manufacturing toys for third party clients. Going all-in - that is, keeping his factory intact in China in hopes the trade war is resolved - is a higher-risk, higher-reward gambit. If tariffs came down quickly, his company would survive, but if they didn't, he'd lose everything. The costs of keeping a large factory running, and paying employees, while producing just a fraction of his normal output, would sink him within several weeks, he says. 'I'm approaching this moment where I have to choose basically to cannibalize myself,' he says. It's hard to pare down a business that once embodied the American dream. Cheung's father came to the U.S. in 1978, after escaping China by swimming across the Shenzhen River into Hong Kong - all for a shot at freedom. He 'wanted to see this business continue through me and hopefully his grandkids,' Cheung says. His dad, he says, is feeling hopeless these days. Though grateful for the life he built here, America's sheen as a land of milk and honey has worn off. "His idea of the U.S. has definitely changed," Cheung says. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
The Star
10-05-2025
- Business
- The Star
Trump Media seeking M&A activity in diversification bid
FILE PHOTO: Devin Nunes, CEO of Truth Social, speaks during a general session at the Conservative Political Action Conference (CPAC) in Dallas, Texas, U.S., August 5, 2022. REUTERS/Go Nakamura/ File Photo (Reuters) -Trump Media & Technology Group is planning to pursue potential mergers and acquisitions, U.S. President Donald Trump's social media firm said on Friday, as it looks to diversify into sectors such as financial services. The company continues to "hunt for top quality assets," CEO Devin Nunes said in a letter to shareholders. Trump Media, which runs the Truth Social streaming and social media platform, envisions ultimately becoming a larger holding company for numerous products and services, it said. The company said in April it had reached a binding agreement to roll out an array of retail investment products, including crypto, a development that has drawn scrutiny from government ethics watchdogs. It ended its first quarter with $759 million of cash, cash equivalents and short-term investments. Total liabilities as of that period stood at $27.2 million. "This amount of liquidity, in conjunction with Trump Media's low operating costs and low cash burn rate, will fully enable it to pursue all its expansion plans, including enhancing its existing platforms, diversifying into fintech and financial services, and pursuing potential mergers and acquisitions," the company said in a statement. In the three months ended March 31, Trump Media's net sales rose more than 6% to $8.2 million. Its net loss also narrowed to $31.7 million in that period. Trump Media shares were little changed in extended trading. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil D'Silva)
