Expert: Chinese firms with US presence should have contingency plans

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Chinese companies operating in the US should have some contingency plans, said Yang Zaiping, secretary general of the Asian Financial Cooperation Association.

American firms who rely heavily on the Chinese market are not the only ones to worry about the recent trade tensions. Chinese companies with a US presence should as well, he indicated.

Yang said Chinese firms with American connections should be considering how to transfer their business to other markets.

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China Eastern Airlines is one company that has set up a group to come up with a relevant plan. It said last week that it could adjust capacity and frequency on the China-US route in the expectation that the trade disputes could impact passenger travel and cargo.

In the meantime, the central bank cannot be at a loose end. From Yang’s perspective, the central bank should consider more about “how to balance international income and payment” as well as keeping the stability of the Chinese yuan.

That also echoes with the words of central bank governor Yi Gang at this year’s Boao Forum. Addressing a question on whether China will use monetary policy as a financial instrument to resolve trade disputes with the US, Yi said that China’s monetary policy mainly focuses on the domestic macroeconomy and serves the real economy.

Yi also stressed that the country’s exchange rate mechanism had been working well. And the second largest economy does not intend to devalue the yuan to deal with the trade frictions.

(CGTN’s Wang Yue also contributed to the story.)