Chinese companies seeking financing in the U.S. are coming up against increased scrutiny after accounting scandals emerged from two high-profile firms, casting doubts over plans for new listings and other financing plans.
TAL Education, a New York-listed education firm run by Chinese billionaire Zhang Bangxin, revealed on Tuesday that an employee is suspected of conspiring with outside vendors to inflate sales. The news sent shares of TAL down almost 9% as of Thursday, wiping out $878 million from Zhang’s fortune.
TAL said the employee in question was taken into police custody, and the affected business unit, called Light Class, accounted for 3% to 4% of its annual revenue.
The announcement came less than a week after Luckin Coffee, a Xiamen-based chain that once positioned itself as a challenger to Starbucks, admitted that more than $300 million of last year’s sales had been fabricated. Analysts say the scandals will undermine investors’ confidence in Chinese firms, adding to the challenges of raising capital in an already difficult market.
“There is no denying that investors are now doubting Chinese companies, especially those touting high growth and new business models,” says Zhu Ning, deputy dean at Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University.
Data provider Dealogic says there are currently 15 Chinese companies planning to each raise between $10 million to $125 million in the U.S.
Zhu says it’s likely that regulatory scrutiny will step up, and the new listings might not reach their desired valuations or attract much interest from institutional investors. He says the risk extends to all forms of financing including issuing debt, meaning companies will need to offer higher returns to appeal to potential lenders.
Luckin’s market cap, which had been as high as $10 billion in early March, had fallen to $1.1 billion before the company’s shares were suspended from trading on April 6. The Nasdaq is seeking additional information from Luckin.
Brock Silvers, managing director of Hong Kong-based Adamas Asset Management, points to wider accounting problems in China, where the COVID-19 pandemic has taken such a heavy toll on so much of the economy.
“It is extremely unlikely that Luckin and TAL are the only two fish in the sea,” he wrote in an emailed note. “The underlying problem is that in recent years China investment has outstripped China profitability. That creates massive pressure, both corporate and personal, to produce unachievable results.”
Another Chinese company was defending itself against similar allegations of false accounting on Wednesday. Shares of Nasdaq-listed video streaming site iQiyi initially dropped 4.6% but recovered loss the following day after it was accused by Wolfpack Research of inflating 2019 results and user numbers. iQiyi denied the allegations, saying the report contains “numerous errors, unsubstantiated statements and misleading conclusions and interpretations.”
Still, lawmakers in the U.S. are likely to seize on recent accounting scandals, and there will be renewed pressure for tighter oversight of China-based auditing firms, says Drew Bernstein, co-chairman of New York-based accounting firm MarcumBP. Citing national security reasons, Beijing has long resisted inspections of the China-based offices of the Big Four accounting firms by the Public Company Accounting Oversight Board (PCAOB), which oversees accounting professionals who provide audit reports of U.S.-traded public companies.
To push for compliance, lawmakers from both parties introduced last June a bill to force U.S.-listed Chinese companies to submit audit reports to U.S. regulators, or face delisting. In response to the Luckin scandal, China’s securities regulator, the China Securities Regulatory Commission, says it condemns this behavior and would crack down on securities fraud in line with international laws.
“While delisting of Chinese stocks remains as a “nuclear option,” I see that as a low probability,” Bernstein says. “If we see cross-border cooperation emerge among regulators, that would be a very positive outcome from this.”
I am a Beijing-based writer covering China’s technology sector. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. Prior to Beijing, I spent six months as an intern at TIME magazine’s Hong Kong office. I am a graduate of the Medill School of Journalism, Northwestern University. Email: ywywyuewang@gmail.com Twitter: @yueyueyuewang
Over seven years as a media executive living in Asia, Brian Lee has made the two-hour hop from Seoul to Shanghai more times than he can remember. But his last flight, on March 9, will be difficult to forget. On arrival at Shanghai’s Pudong International Airport, Lee was told that regulations had tightened while he was in the air and all passengers arriving from South Korea now had to submit to 14 days’ government quarantine due to the COVID-19 outbreak.
The New Yorker was driven to a specially requisitioned three-star hotel, where nurses in hazmat suits handed him a mercury thermometer, to self-check his temperature twice daily, and a single plastic trash bag. Meals are left outside his door at 8:30 a.m., 12 noon and 6 p.m. each day. Other than opening his door to pick up his food, he has not seen beyond the drab confines of his room since. “I’m trying to stay active and positive,” says Lee, 27, a business manager for Shanghai-based media platform Radii. “I’ve been doing pushups and trying to do all the reading and writing that I haven’t had time for.”
As cases of COVID-19 stabilize in China and soar across the U.S., Middle East and Europe, the Beijing government has been busy recasting China as a sanctuary from the deadly virus, which has so far sickened 169,000 and killed at least 7,000 across the world. China’s strongman President Xi Jinping even visited the central city of Wuhan, the epicenter of the outbreak, on March 10. China’s strongest leader since Mao Zedong declared that the virus was “basically curbed” across Hubei province, where Wuhan is the capital.
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Hong Kong infectious disease expert Yuen Kwok-yung discussed the situation of the Wuhan coronavirus outbreak with TIME in an exclusive interview. He warns that the disease is very infectious and control measures must be followed.
When TIME visited Wuhan in the early days of the outbreak on Jan. 22, students were still gossiping in cafes, while shoppers browsed for meat and fish for Lunar New Year festivities. But the city that Xi toured was a ghostly relic after seven weeks of bruising quarantine that has decimated the local economy. Still, China’s official press agency Xinhua has already announced a forthcoming book on how Xi’s “outstanding leadership as a great power leader” defeated the virus. The Great Power War will be available in six languages. State media has engaged in unabashed triumphalism while describing the U.S. response as “floundering.”
But even as Chinese Communist Party (CCP) propaganda ramps up, the experiences of people like Lee show that life across the Asian superpower remains far from normal. Offices are slowly reopening but central heating banned for fear of spreading germs. Taxi drivers hang sheets of plastic behind the front seats of their cabs to cocoon themselves from passengers. One friend in Beijing returned to work to find “the receptionist in a full white hazmat suit.” Another complained that the incessant spraying of germ-killing bleach had murdered all the office plants. The guy who installed my cable TV has also begun hawking medical masks, which are de rigueur for entering any supermarket. Grabbing noodles with my wife means sitting diagonally across a four-person table to comply with social distancing rules. When I tried to book an appointment with a lawyer, it had to be in Starbucks—her office had banned visitors—and even then the barista chastised her for standing closer than four feet while witnessing me signing documents.
More than anything, suspicion has shifted outward. Whereas ethnic Asians have faced prejudice around the globe due to the virus, inside China the tables have turned, with foreigners now the target of suspicion as cases rise overseas. This has been catalyzed by state propaganda leaping on China’s apparent success in stemming the virus as evidence that its political system is superior to Western-style democracy.
It would be “impossible for European countries to adopt the extreme measures that China has implemented” to fight the virus, the CCP mouthpiece Global Timesargued in a recent editorial. Sure enough, Robert Redfield, director the U.S. Centers for Disease Control and Prevention, told American lawmakers March 10 that [in terms of infections] “the new China is Europe.”
Security guards bark inquisitions when they see a foreign face—“what’s your nationality? where have you been for the last two weeks?”—so that many outsiders limit their social interactions to where they feel best known. My local barber says he not longer serves foreign customers.
Suspicion is especially pronounced for Italians, given their homeland’s rise to second in COVID-19 cases after China, with 25,000 infected. Ambra Schiliro, president of the Sicily Association in China, says that one Italian under self-quarantine in her Shanghai apartment had angry neighbors call the police to demand she move to a hotel. Andrea Fenn, a member of the Italian Chamber of Commerce in China, says that after some clients came to his office his Chinese partner discretely asked him, “Were they Italian? Where had they come from? Could I vouch for them?” Still, “It was an understandable reaction,” he says, “and nothing compared to the discrimination Asian people experienced in Italy at the beginning of the crisis.”
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Suspicion may be quite natural given Chinese state media’s self-serving tactic of highlighting the number of new COVID-19 cases that have arrived from overseas. On March 16, state media reported that 12 of the day’s 16 new COVID-19 infections were imported. On March 17, it was 20 out of 21. As such, in glaring doublespeak, Beijing’s own travel restrictions are deemed “essential measures,” even as countries that have closed borders with China are denounced.
Stefen Chow was lucky that he was permitted to self-quarantine in his own home upon arriving in Beijing after visiting his family home in Singapore. Only he was allowed to venture outside to collect deliveries, however, while his wife and two young children—aged four and six—couldn’t leave their front door for 14 days.
But much like what’s currently unfolding in the U.S., regulations for each Chinese city differ, and the lack of clarity regarding containment protocols has a chilling effect on business. Currently, even those traveling from Shanghai to the neighboring city of Suzhou for a meeting are technically required to submit to 14 days quarantine, perhaps even at a government facility, meaning few take the risk of venturing beyond the city limits. Those who have stayed at home must also self-quarantine if a roommate or family member returns from overseas or another province.
But in practice, implementation is largely at the discretion of CCP neighborhood committees, known as ju wei hui, or individual security guards — some of whom use their new power to shamelessly flirt with passers-by. “It has been frustratingly confusing,” says Ker Gibbs, president of the American Chamber of Commerce in Shanghai. “People don’t know if they can access their own apartment building, let alone their office.”
Returning to some semblance of normalcy is imperative for the Chinese and global economies. According to official data, China’s manufacturing and services sectors sank to record lows in February, car sales plunged by 80%, and China’s exports dropped 17.2% overall in January and February. As of March 18, China’s economy was operating at 71.% of typical output, according to policy research firm Trivium. Factories are being inspected one-by-one before getting the green light to reopen, but the pace of revival will depend on the nature of business; services can recover much faster than manufacturing, for example, given the latter’s reliance on knotty supply chains. High-tech and highly automated manufacturing also has a greater capacity to bounce back, being less labor-focused.
But with demand expected to crater across every sector, especially as the virus goes global, all anticipate lean times ahead. More than 100 real estate firms across the country filed for bankruptcy in January and February. Officials have been encouraging both state and private landlords to waive rents to prevent more firms going under. “I would still give [the government] reasonably high marks for communication and being proactive with business community,” says Gibbs.
Still, the state is keeping a very close eye on those attempting to re-energize the world’s number two economy. Across China, officials outside office buildings and residential compounds note visitors’ names, contact information, ID numbers and travel history in order to feed to a police database. People in some cities must register phone numbers with an app in order to take public transport. Online retail giant Alibaba has rolled out its Health Code App across 200 Chinese cities that rates users green, yellow or red dependent on travel history and possible contact with infected people. Anyone who has left the city in the past two weeks is liable to get a yellow code, and with green mandatory for access to most malls and office buildings in big cities, few book frivolous travel lest they jeopardize their score. A red code requires 14 day quarantine.
Apart from privacy concerns across what is already the world’s most surveilled state, the app has sparked consternation among those suddenly ordered to quarantine themselves with no explanation why.
There is growing weariness about measures that are little more than box-ticking. Masks are mandatory outside the home despite huge doubts over their efficacy. A temperature test is required to enter any shop, restaurant building, or even pass certain street corners. But these are so casually administered that people with readings so low as to indicate clinical hypothermia are routinely waved by. On countless occasions I’ve been rudely accosted by a supercilious doorman only for him to point the temperature gun at my coat sleeve. It’s especially frustrating since COVID-19 can spread while asymptomatic, rendering these tests ultimately pointless.
Bosses unused to employees working from home are putting them under extreme pressure, believing only increasing workload can ensure productivity at home. Miss Li, who works for Beijing start-up Bytedance and asked that TIME only uses one name as she was not permitted to speak with the media, says that she used to work 9 am to 9 pm, 6 days a week, commonly known by the shorthand “996” in China. “But now we joke that has become 007—midnight to midnight, 7 days a week,” she says.
And despite official efforts to spin the disaster, initial bungling and attempts to coverup the crisis mean the Party’s legitimacy will take a hit. A campaign to ensure the people of Hubei express “gratitude” to the CCP for containment efforts received short shrift. “The government should end its arrogance and humbly express gratitude to its masters—the millions of people in Wuhan,” wrote noted blogger Fang Fang in a post of remarkable bravery given China’s strict censorship.
Another comment appended to the profile of a whistleblower doctor quickly went viral: “The doctor risks her job to take interview, the reporter risks being charged with fabricating rumors to write the article, the media risks being shut down to publish the article, and people on WeChat risk having their accounts blocked to share the article. Today we need this ridiculous level of tacit cooperation just for a word of truth.”
Of course, truth in China is whatever the Party deems it to be. One recent afternoon, I noticed four medical personnel in hazmat suits loitering outside my apartment building. After a few minutes a neighbor pulls up with airport tags on her luggage. The medical staff check her temperature, make her sign various papers and escort her home. She won’t reappear for 14 days. Suddenly alarmed, I opened my Health Code App to check my rating is still green. China may spy victory over the virus, but normal lies a long way off, if it ever returns at all.
Mar.12 — The faltering return of China’s oil refineries, power plants and gas importers shows it’s too soon to count on the world’s biggest energy user to revive beleaguered global prices. Meanwhile, while corporate-debt markets shut down for issuers in the U.S. and Europe for a stretch in February, with investors spooked by the economic hit from the coronavirus, China had its busiest month on record. Bloomberg’s Selina Wang reports on “Bloomberg Markets: Asia.”
Markets in Asia and the Middle East opened sharply lower on Monday as investors digested the relentless global spread of the coronavirus and turmoil in the oil markets. Shares in Saudi Aramco, the state oil giant, dropped 10 percent leading to a halt in trading on the Riyadh stock market.
Asian markets opened sharply lower on Monday as investors digested the relentless global spread of the coronavirus and turmoil in the oil markets.Tokyo was down 4.7 percent at midmorning on Monday, while Hong Kong was down 4.1 percent. Futures markets showed investors predicting sharp drops in Wall Street and Europe as well.
The coronavirus has unnerved investors as it spreads, clouding the prospects for global growth. Italy on Sunday put a broad swath of its industrial northern region under lockdown as the virus has spread, making it one of the biggest sources of confirmed infections outside China. France, Saudi Arabia, Iran and other countries also took further steps to stop the spread.
In the United States, the number of confirmed infections exceeded 500 cases. A top American expert said on Sunday that regional lockdowns could be necessary.A clash over oil between Russia and Saudi Arabia, two major producers, further unnerved investors. As the coronavirus hits demand for fuel, Saudi Arabia slashed its export oil prices over the weekend, starting an apparent price war aimed at Russia.
Lower oil prices could help consumers, but it could unsettle countries that depend on oil revenue to prop up their economies. In futures markets, the benchmark price for American and Europe oil supplies tumbled $10, or about one-quarter.Investors fled to the safety of the bond market, driving yields lower. In the market for U.S. Treasury bonds, yields broadly fell below the 1 percent level for both short term and long term holdings. The 10-year Treasury bond, which is closely watched, was yielding about 0.5 percent.
In other Asian markets, South Korea was down 3.6 percent. Shanghai was down 1.5 percent.
Italy reported a huge jump in deaths from the coronavirus on Sunday, a surge of more than 50 percent from the day before, as it ordered an unprecedented peacetime lockdown of its wealthiest region in a sweeping effort to fight the epidemic. The extraordinary measure restricted movement for a quarter of the country’s population.“We are facing an emergency, a national emergency,” Prime Minister Giuseppe Conte said in announcing the government decree in a news conference after 2 a.m.
The move is tantamount to sacrificing the Italian economy in the short term to save it from the ravages of the virus in the long term. The measures will turn stretches of Italy’s wealthy north — including the economic and cultural capital of Milan and landmark tourist destinations such as Venice — into quarantined red zones until at least April 3.
They will prevent the free movement of roughly 16 million people. Funerals and cultural events are banned. The decree requires that people keep a distance of at least one meter from one another at sporting events, bars, churches and supermarkets. The Italian outbreak — the worst outside Asia — has inflicted serious damage on one of Europe’s most fragile economies and prompted the closing of Italy’s schools. The country’s cases nearly tripled from about 2,500 infections on Wednesday to more than 7,375 on Sunday. Deaths rose to 366.
More and more countries have adopted or are considering stronger measures to try to keep infected people from entering and to contain outbreaks. More and more countries have adopted or are considering stronger measures to try to keep infected people from entering and to contain outbreaks.
On Sunday, Saudi Arabia cut off access to Shiite Muslim towns and villages in the east of the kingdom, cordoning off an area in Qatif Governorate where all 11 of the country’s confirmed coronavirus cases have been identified. And local Saudi media reported that the country would temporarily close down all educational institutions and block travel to and from a number of countries in the region. The kingdom had already suspended pilgrimages to the Muslim holy cities of Mecca and Medina.
In Iran, which has been hit the hardest in the Middle East, state media reported that all flights to Europe would be suspended indefinitely. The health minister in France, one of Europe’s bigger trouble spots, announced a ban on gatherings of more than 1,000 people. The U.S. has counted at least 539 cases across 34 states — Connecticut reported its first case and Washington announced another patient being treated for coronavirus had died on Sunday — and the District of Columbia, and logged 22 deaths. Washington State, New York, California, Maryland and Oregon have declared emergencies.
A growing number of schools are shutting down across the country, raising concerns about the closings will affect learning, burden families and upend communities. The U.S. Army suspended travel to and from Italy and South Korea, now the world’s third largest hot spot, until May 6, an order that affects 4,500 soldiers and family members. And the Finnish armed forces announced that troop exercises planned for March 9-19 with Norway would be scrapped.
On Sunday, the leading U.S. expert on infectious diseases, Dr. Anthony S. Fauci, said that it was possible that regional lockdowns could become necessary and recommended that those at greatest risk — the elderly and those with underlying health conditions — abstain from travel. Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases, said the Trump administration was prepared to “take whatever action is appropriate” to contain the outbreak, including travel restrictions in areas with a high number of cases.
“I don’t think it would be as draconian as ‘nobody in and nobody out,’” Dr. Fauci said on “Fox News Sunday.” “But there’ll be, if we continue to get cases like this, particularly at the community level, there will be what we call mitigation.”
Even as the rate of new infections appeared to taper in China, the number of cases around the world continued to rise on Sunday, with some of the biggest clusters emerging in Europe. Besides the sharp rise in Italy, Germany reported more than 930 cases; Switzerland’s total reached 281; and Britain’s health department said that three people with the virus had died and that the number of cases in the country had jumped to 273 by Sunday. The smallest E.U. nation, Malta, reported its first confirmed case on Saturday: a 12-year-old girl recently returned from a vacation in northern Italy. Her condition was described as good.
The Spanish authorities announced on Sunday that three more people diagnosed with coronavirus had died in Madrid, raising the number of coronavirus fatalities in the country to 13. There are now over 500 cases, the authorities said. Salvador Illa, Spain’s health minister, said at a news conference in Madrid that several cases in Spain were linked to people who recently traveled to Italy.
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The new coronavirus Covid-19 will end up being the final curtain on China’s nearly 30 year role as the world’s leading manufacturer.
“Using China as a hub…that model died this week, I think,” says Vladimir Signorelli, head of Bretton Woods Research, a macro investment research firm.
China’s economy is getting hit much harder by the coronavirus outbreak than markets currently recognize. Wall Street appeared to be the last to realize this last week. The S&P 500 fell over 8%, the worst performing market of all the big coronavirus infected nations. Even Italy, which has over a thousand cases now, did better last week than the U.S.
China On Hold
On January 23, Beijing ordered the extension of the Lunar New Year holiday, postponing a return to work. The coronavirus was spreading fast in the epicenter province of Hubei and the last thing China wanted was for that to be repeated elsewhere. Travel restrictions and quarantines of nearly 60 million people drove business activity to a standstill.
The most frightening aspect of this crisis is not the short-term economic damage it is causing, but the potential long-lasting disruption to supply chains, Shehzad H. Qazi, the managing director of China Beige Book, wrote in Barron’s on Friday.
Chinese auto manufacturers and chemical plants have reported more closures than other sectors, Qazi wrote. IT workers have not returned to most firms as of last week. Shipping and logistics companies have reported higher closure rates than the national average. “The ripple effects of this severe disruption will be felt through the global auto parts, electronics, and pharmaceutical supply chains for months to come,” he wrote.
Workers in uniforms at a LED lighting factory in Dongguan, China. Around 70% of the world’s LED … [+]
Getty
That China is losing its prowess as the only game in town for whatever widget one wants to make was already under way. It was moving at a panda bear’s pace, though, and mostly because companies were doing what they always do – search the world with the lowest costs of production. Maybe that meant labor costs. Maybe it meant regulations of some kind or another. They were already doing that as China moves up the ladder in terms of wages and environmental regulations.
Under President Trump, that slow moving panda moved a little faster. Companies didn’t like the uncertainty of tariffs. They sourced elsewhere. Their China partners moved to Vietnam, Bangladesh and throughout southeast Asia.
Enter the mysterious coronavirus, believed to have come from a species of bat in Wuhan, and anyone who wanted to wait out Trump is now forced to reconsider their decade long dependence on China.
Retail pharmacies in parts of Europe reported that couldn’t get surgical masks because they’re all made in China. Can’t Albania make these things for you? Seems their labor costs are even lower than China’s, and they are closer.
The coronavirus is China’s swan song. There is no way it can be the low-cost, world manufacturer anymore. Those days are coming to an end. If Trump wins re-election, it will only speed up this process as companies will fear what happens if the phase two trade deal fails.
Picking a new country, or countries, is not easy. No country has the logistic set up like China has. Few big countries have the tax rates that China has. Brazil surely doesn’t. India does. But it has terrible logistics.
Then came the newly signed U.S. Mexico Canada Agreement, signed by Trump into law last year. Mexico is the biggest beneficiary.
It’s Mexico’s Turn?
Hecho en Mexico. Porque no?
Getty
Yes. It is Mexico’s turn.
Mexico and the U.S. get a long. They are neighbors. Their president Andres Manuel Lopez Obrador wants to oversee a blue collar boom in his country. Trump would like to see that too, especially if it means less Central Americans coming into the U.S. and depressing wages for American blue collar workers.
According to 160 executives who participated in Foley & Lardner LLP’s 2020 International Trade and Trends in Mexico survey, released on February 25, respondents from the manufacturing, automotive and technology sectors said they intended to move business to Mexico from other countries – and they plan on doing so within the next one to five years.
“Our survey shows that a large majority of executives are moving or have moved portions of their operations from another country to Mexico,” says Christopher Swift, Foley partner and litigator in the firm’s Government Enforcement Defense & Investigations Practice.
Swift says the move is due to the trade war and the passing of the USMCA.
The phase one China trade deal is a positive, but the coronavirus – while likely temporary — shows how an over-reliance on China is bad for business.
There will be fallout, likely in the form of foreign direct investment being redirected south of the Rio Grande.
“Our estimates of possible FDI to be redirected to Mexico from the U.S., China and Europe range from $12 billion to $19 billion a year,” says Sebastian Miralles, managing partner at Tempest Capital in Mexico City.
“After a ramp-up period, the multiplier effect of manufacturing FDI on GDP could lead Mexico to grow at a rate of 4.7% per year,” he says.
Trump arrives to speak about the United States – Mexico – Canada agreement, known as USMCA, during a … [+]
AFP via Getty Images
Mexico is the best positioned to take advantage of the long term geopolitical rift between the U.S. and China. It is the only low cost border country with a free trade deal with the United States, so there you have it.
Thanks to over 25 years of Nafta, Mexico has become a top exporter and producer of trucks, cars, electronics, televisions, and computers. Shipping a container from Mexico to New York takes five days. It takes 40 days from Shanghai.
They manufacture complex items like airplane engines and micro semiconductors. Mexico is the rank the 8th country in terms of engineering degrees.
Multinational companies are all there. General Electric is there. Boeing is there. Kia is there.
The trade war is yet to be decided, but the damage that has already been done will not be undone. Room for a new key commercial ally is open.
A worker at Canada’s Bombardier factory in Mexico. (Photo by Carlos Tischler/SOPA Images/LightRocket … [+]
LightRocket via Getty Images
Safety remains a top issue for foreign businesses in Mexico who have to worry about kidnappings, drug cartels, and personal protection rackets. If Mexico was half as safe as China, it would be a boon for the economy. If it was as safe, Mexico would be the best country in Latin America.
“The repercussions of the trade war are already being felt in Mexico,” says Miralles.
Mexico replaced China as the U.S. leading trading partner. China overtook Mexico only for a short while.
According to Foley’s 19 page survey report, more than half of the companies that responded have manufacturing outside of the U.S. and 80% who do make in Mexico also have manufacturing elsewhere. Forty-one percent of those operating in Mexico are also in China.
When respondents were asked about whether global trade tensions were causing them to move operations from another country to Mexico, two-thirds said they already had or were planning to do so within a few years. A quarter of those surveyed had already moved operations from another country to Mexico on account of the trade war.
For those considering moving operations, 80% said they will do so within the next two years. They are “doubling down on Mexico”, according to Foley’s report.
Of the companies that recently moved their supply chain, or are planning to do so, some 64% of them said they are moving it to Mexico.
I’ve spent 20 years as a reporter for the best in the business, including as a Brazil-based staffer for WSJ. Since 2011, I focus on business and investing in the big emerging markets exclusively for Forbes. My work has appeared in The Boston Globe, The Nation, Salon and USA Today. Occasional BBC guest. Former holder of the FINRA Series 7 and 66. Doesn’t follow the herd.
