China saved American companies from failure

China saved American companies from failure

China in the second quarter provided American companies with orders that they missed on the local market. This is reported by the Wall Street Journal.

Executives of some American brands have admitted that Beijing saved them from financial failure. China has become “a story of recovery, stabilization, and growth,” said the chief operating officer of Skechers USA Inc. David Weinberg. Sales of this sneaker manufacturer fell 42 percent last quarter, but in China, they rose 11.5 percent.

Despite rising tensions between Washington and Beijing, Chinese consumers have not turned away from American brands, and US companies have been able to take advantage of the recovery in the Chinese economy. For example, the total revenue of LVMH Moet Hennessy Louis Vuitton SE for April-June fell by 38 percent, and in China jumped by 65 percent.

Analysts believe that retail sales in China will resume growth in the third quarter. Experts from the Economist Group forecast growth of a percentage, and in the fourth quarter — by 2.4 percent.

China's GDP shrank by 6.8 percent in the first quarter, but a recovery began in the second. China's economy expanded by 3.2 percent. The drop in US GDP in the second quarter of 2020 was 32.9 percent compared to the same period last year.

Relations between the countries remain tense, as the sides have been fighting a trade war since 2017. In early 2020, China and the United States concluded the” first phase “ of a trade deal, then Beijing agreed to buy more American goods. However, the American side later accused China of hiding data on the spread of the coronavirus and refused to conclude the “second phase of the deal”.

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