More Chinese consumers willing to boycott US goods
Most Chinese consumers say they are ready to boycott US goods as the trade war worsens, but the likelihood of a government-orchestrated move to encourage them to do so remains low for now.
An FT Confidential Research survey of 1,000 urban consumers found just over 60 per cent saying they would or definitely would stop buying US goods as a result of the trade war, up from the 54 per cent who said they would do so in a similar survey conducted last summer.
The latest survey, which was conducted in mid-June, ahead of the Osaka meeting between Xi Jinping and Donald Trump but also of the US president’s latest tariff threat, found the proportion of consumers saying they would probably or definitely not change their behaviour remaining unchanged at about 13 per cent.
Donald Trump’s threat — and it remains just that — to levy 10 per cent tariffs on another $300bn in Chinese goods again raises questions about the potential for a Chinese consumer boycott of US goods.
If this is not just a negotiating tactic and the president does go ahead with his latest threat, that would mean tariffs are levied on practically everything that China sells to the US. With China’s retaliatory tariffs already covering nearly everything that it buys from the US, the government would have to explore non-tariff steps against Mr Trump’s trade actions.
In response to Mr Trump’s tweeted threat, the Ministry of Commerce pledged to take “necessary countermeasures” if he goes ahead, but did not elaborate.
Whipping up a consumer boycott of US goods would seem an easy and populist way of expressing discontent with White House policy. The Chinese government has wielded consumer boycotts in the past as a cudgel, most recently against Japan and South Korea (in 1905, the imperial government stopped a grassroots boycott of American goods over the treatment of Chinese immigrants in the US).
This time may be different. However strong the nationalist impulse to lash out at US brands such as Apple, China’s leadership is keen to present itself as a responsible global trade actor and opponent of protectionism and so may prefer less visible and less socially and economically disruptive ways of showing its displeasure.
Some of these could echo the quiet steps taken against Korea during a diplomatic spat over the decision to deploy a missile system in 2016. Applications for performance licences by Korean acts were refused without explanation, the operations of Korean companies were disrupted by local authorities and domestic tour companies stopped offering trips to Korea.
It is hard to tell if China is already moving against US cultural imports as a result of the trade war. Although US actors have said they have been banned from Chinese movie studios, China’s media industry is even more risk-averse than usual this year as government scrutiny tightens ahead of the 70th anniversary of the founding of the People’s Republic of China in October.
Apple would be a logical target in any consumer boycott. As well as being a very visible US brand, the White House clampdown on Huawei supports the rationale for taking action against a market leader in the same industry.
However, despite reports of online chatter that a targeted boycott against Apple is already under way, there is little evidence that the iPhone has become a casualty of the trade war.
In its latest earnings report Tim Cook, chief executive, was upbeat on the company’s performance in China, while a June FT Confidential Research survey of consumer brand preference for mobile phones showed Apple bouncing back from a fall at the end of last year.
The survey also shows the increasing dominance of Huawei in the Chinese smartphone market, something we previously ascribed to a groundswell of patriotic support in the wake of US actions against the company.
However, Huawei has not risen at Apple’s expense — the iPhone’s fans remain loyal, helped by the stickiness of the iOS, Apple’s proprietary operating system. Instead, consumers appear to be abandoning other Android-powered phones such as those made by domestic competitors Xiaomi, Oppo and Vivo for Huawei’s superior technology.
If some commentators online are calling for a boycott of Apple products, others note the company’s economic importance to China.
Apple said in a report last month that it now supported more than 5m jobs in China.
FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and south-east Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors