Global Times Points Out “Increasing Reliance” On China By Apple And Tesla
Nice business you’ve got there. Would be a shame if something happened to it.
That’s the vibe we got after China’s state owned media took the time to point out that both Tesla and Apple have a growing reliance on the country for their success on Tuesday of this week.
Global Times staff reporters penned an article this week called “Tesla, Apple to source growth from increasing reliance on China”. The gist of the article is that both companies’ upcoming earnings are going to show their “increasing reliance” on China, which has become a “pivotal market” for them both.
“The successes of these two companies in China can be seen as a proxy for US businesses that are truly committed to the Chinese market,” the report says.
Zeng Zhiling, managing director of LMC Automotive Consulting in Shanghai, commented: “There are concerns over whether Tesla’s production can keep up with its sales goals.”
Zeng also said that the company’s Shanghai Gigafactory would likely take on a larger role in the company’s manufacturing plans. He says there is “lackluster” progress with Tesla’s European expansion efforts. “The European market, which has an array of viable electric car brands, is hardly a place for Tesla to exercise its magic power,” he said.
We covered the China risk to Tesla’s business in our recent piece suggesting that Elon Musk’s Chinese fairy tale could eventually come to an end. We also noted that, to date, Musk has been able to sidestep some ugly press in China, including out of control Tesla vehicles, forced recalls, constant price cuts and disgruntled customers.
Industry analyst Ma Jihua told the Global Times that Apple’s 5G phones “are likely to be more alluring to Chinese consumers as 5G handsets from other vendors are generally priced in the higher-end range”. He also noted that China’s smartphone shipments are currently in decline, despite the rise of 5G.
China is in the midst of growing tensions with the U.S. that started during the Trump administration as a result of the U.S. re-examining Chinese businesses on U.S. stock exchanges and companies tied to the Chinese state and Chinese military.
Based on what the Global Times could be “saying without saying” in this article, it looks as though those tensions may very well continue into 2021.
Wed, 01/27/2021 – 13:22
via ZeroHedge News https://ift.tt/2M8Nssg Tyler Durden