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Illustration: Rebecca Zisser/Axios

American brands are facing challenges in the Chinese market, as trade and geopolitical disputes wage on for the two countries, the Wall Street Journal reports.

Why it matters: Western executives had long-established plans to dominate the Chinese market, but global consumer brands now have a smaller market share in China than at any other time since the last financial crisis, per WSJ.

The big picture: U.S. companies have "miscalculated how difficult it would be to gain a permanent foothold in a country that has turned toward patriotism," the Wall Street Journal writes. Chinese consumers want more products that showcase their pride in being Chinese.

  • Chinese brand recognition is increasing in the market as the quality of goods continues to improve.
  • Chinese consumers are rejecting some foreign brands "because they have run afoul of Chinese politics," writes the Wall Street Journal.

The impact: Consumer spending in China on foreign products is extremely important since it contributes to about 1/3 of global growth, according to WSJ. If more Chinese consumers don't buy foreign products, it will force Western companies to rely on domestic buyers and markets.

  • 70% of smartphone sales in China came from foreign brands Nokia, Samsung and Apple as of 2011; while in 2019, 71% of smartphone sales were from Chinese brands Huawei, Oppo and Vivo, per WSJ.
  • Meanwhile, Pizza Hut and KFC have responded to the shifts by incorporating more locally influenced products.
  • Carrefour and Uber, among other American companies, have decided not to enter the Chinese market because it'd be too complex or costly for them to navigate.

Go deeper:

Go deeper

Texas AG sues Biden administration over deportation freeze

Texas Attorney General Ken Paxton speaks to members of the media in 2016. Photo: Alex Wong/Getty Images

Texas Attorney General Ken Paxton is suing the Biden administration in federal district court over its 100-day freeze on deporting unauthorized immigrants, and he's asking for a temporary restraining order.

Between the lines: The freeze went into effect Friday, temporarily halting most immigration enforcement in the U.S. In the lawsuit, Paxton claims the move "violates the U.S. Constitution, federal immigration and administrative law, and a contractual agreement between Texas" and the Department of Homeland Security.

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