Original Analysis on Current Events

FAO Global conducts analysis on hundreds of significant events a week that impact the business environment between the U.S., China, and emerging economies in Asia. While most of these assessments are for client and internal use, we like to share events that may have been overlooked if you only follow the major media outlets. We send these assessments out via our newsletter.

Highlights you may have missed for the week of July 22-26, 2019.

1. Ford’s Shrinking China Business Is Hurting Its Global Ambitions – Wall Street Journal 

Analyst Take: Ford Motor Company sales fell by 27% between January to June 2019, compared to the same timeframe a year ago. Like Ford, many other established global car manufacturers are experiencing the decline of sales in China, partly because of the quick pace of innovation from domestic competition. The localization and advancement of consumer options threatens foreign competitors. Chinese customers are now faced with very diverse choices when considering what car to purchase and it’s important for foreigner companies to understand what local customers are looking for. FAO Global recommends foreign manufacturers in create localized marketing campaigns and options that appeal to the Chinese consumer as well as keeping pace with local competitors. 

Analysis contributed by FAO Global Associate, Sophia Song

2. Chinese investment into the US has plunged 90% since Trump took office — and poorer states may get hit the hardest – Market Insider  

Analyst Take: The U.S.-China trade tensions have increased the level of distrust between the two superpowers and this has trickled down into the foreign direct investment (FDI) environment. China’s economic slowdown and stricter capital controls combined with trade tensions have caused an estimated 90% decrease in FDI. The drop in Chinese investment is likely to harm industries including real estate, automotive, tech and agriculture. States that have depended on Chinese cash like Michigan, South Carolina, Missouri, and Texas rely on Chinese FDI for investment and growth. FAO Global suggests that American businesses who have teamed up with foreign funds, especially Chinese partners, should have a firm grasp of current politics and attitudes towards Chinese investment to avoid the future uncertainties.  

Analysis contributed by FAO Global Associate, Jennifer Hsu

3. Harley-Davidson Cuts Forecast for Motorcycle Shipments – Wall Street Journal 

Analyst Take: Sales are down 6% for motorcycles and related products and Harley Davidson is facing challenges to its global expansion. Their traditional customer base is shrinking creating an urgency to attract younger customers and sell more motorcycles on the international market. FAO Global recommends similar companies in the U.S. pro-actively pursue new sales channels in Southeast Asia countries such as Thailand and Vietnam where the motorcycle industry is rapidly growing. Building strategic partnerships with dealerships in motorcycle friend countries and creating the community around the bikes is essential for the continued growth. 

Analysis contributed by FAO Global Associate, Sophia Song

4. Doctors in Singapore now have a smart assistant backed with AI technology from China’s Ping An – South China Morning Post 

Analyst Take: Cutting-edge artificial intelligence (AI) technology is boosting the medical services worldwide.  Many Chinese companies are also considering applying AI technology for various medical tasks such as the reading, processing, and analyzing data to support medical consultations and research. With the emergence of abundant opportunities using AI technology in the medical industry, FAO Global reminds foreign companies to focus on growing industries such as aviation, healthcare, and new energy vehicles when developing AI applications.  

Analysis contributed by FAO Global Associate, Sophia Song

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Edits by Kelli Sullivan

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