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China's rebounding economy a vital refuge for US firms

chinadaily.com.cn | Updated: 2020-08-14 13:39
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Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, Jan 7, 2020. [Photo/Agencies]

China has become a vital refuge for US companies after overcoming COVID-19, as the country's rebounding consumer economy has helped offset the damage from tumbling sales back home, the Wall Street Journal reported.

Some of America's best-known brands, including Tesla and Nike, have been buoyed by strong results from China, which has long been an important destination for US companies.

Tesla reported revenue of $1.4 billion in China in the second quarter, soaring 102.9 percent year-on-year and accounting for 23.19 percent of the total. The company delivered 31,000 electric vehicles to China-based customers in Q2, accounting for one-third of its global sales.

"China offered a model of recovery, stabilization and then growth," David Weinberg, CEO of Skechers USA Inc, told analysts on an earning call. Overall, the sneaker company's quarterly sales dropped 42 percent from a year earlier but were bolstered in part by 11.5 percent growth in China.

China's retail sales of consumer goods declined 3.9 percent year-on-year in the second quarter, an improvement of 15.1 percentage points from the first quarter. US retail sales, by comparison, declined 8.1 percent year-on-year in the second quarter.

US brands have suffered little commercial fallout among Chinese consumers, enabling them to capitalize on the economic rebound in China, the journal said.

Nike returned to growth in China in its most recent quarter, as China sales rose 1 percent from a year earlier, helping offset a global revenue decline of 38 percent.

Coffee chain giant Starbucks Corp reported a 38 percent decline in global quarterly revenue, while in China, the figure was a 19 percent drop. The company's chief executive Kevin Johnson said he was optimistic Starbucks would substantially recover its sales in China by the end of 2020.

Sportswear maker Under Armour didn't break out China numbers, but it pointed to a more muted recovery.

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