...To understand why, consider some new Oreo flavors. In August, U.S. snack food giant Mondelez International Inc. rolled out “hot chicken wing” and wasabi-flavored versions of the classic American cookie. Not quite to your taste? Well, they may not be aimed at you. The new cookies are being sold only in China. More than that, they were developed at Mondelez’s research center in Suzhou and are produced by factories on the mainland. Mondelez launched the new entries on JD.com, a Chinese online retailer. (The first batch sold out in nine hours, according to Mondelez.)
...American firms very often invest and manufacture in foreign markets instead of exporting their products from the U.S. By contrast, Chinese companies, like those in emerging markets generally, tend to lack brand power and experience operating abroad. So they capitalize on their low-cost base to export to the U.S. and elsewhere.
...Since 1990, U.S. companies have invested almost twice as much in China — $256 billion — as Chinese companies have in the U.S. And a huge chunk of China’s investment has been made in only the past two years. To a certain extent, the trade deficit is thus a mark of how much more advanced U.S. corporations are compared to their Chinese counterparts.
...But in many cases, the plants constructed in China weren’t replacements for those in the U.S.; they were built to meet local needs. .
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