Trade row with US benefiting some firms

One of the unexpected outcomes — a blessing in disguise, if you will — of China-US trade tension is that import-reliant sectors in China are seeking cheaper suppliers at home and abroad, creating unforeseen growth opportunities for Chinese small and medium-sized enterprises, industry insiders said.

SMEs hurt by higher US import tariffs or previously hindered by imports are embracing change and new strategies to thrive amid tensions.

Biobase Group, a manufacturer of laboratory equipment and diagnostic kits based in Shandong province, stands out as one of the firms converting threats into opportunities and challenges into strength-enhancers.

Gan Yiwu, chairman of Biobase, typifies this new style of corporate thinking. In his office, two maps adorn a wall. The world map highlights some countries and regions participating in the Belt and Road Initiative. The China map shows over 20 places marked with a dot. Together, the maps represent Gan’s ambitious vision for Biobase’s future footprint.

That’s a far cry from the recent past, when Biobase struggled to get orders — even from Chinese firms — because the latter were all busy importing from the United States. The trade dispute, however, has proved to be a game-changer.

“We’ve built offices in 19 Chinese cities now,” Gan said, pointing to the national map. “China is the world’s second-largest consumer of medical equipment but the local market was heavily reliant on imports. Now, it’s different. Opportunities beckon. We’ll invest more now in innovation and on building our own brands.”

Like Biobase, Zhejiang Huada New Material Corp, a producer and exporter of steel products like hot-dip steel sheets coated in aluminum and zinc, sees the trade dispute as an opportunity to grow.

Its business has not been affected much by the tensions because the US has never been one of its key export markets. The success of the BRI, meanwhile, is encouraging the company to leverage China’s brand equity and expand globally like many Chinese companies, said Wang Liping, general manager of Huada’s overseas business.

Founded in 2003, Huada New Material started exports to the Middle East in 2011 to exploit demand there amid a fiercely competitive domestic market. Its strategy to tap channels like international exhibitions paid rich dividends.

Ninety percent of its $200 million annual output is exported to about 50 BRI participants, particularly infrastructure-hungry Southeast Asian markets, where potential for future growth is immense, Wang said.