Beijing is preparing for the Republican tycoonS return to the White House in January. His first term had already been marked by a trade stalemate with China, accused of intellectual property theft and other “unfair” practices.Donald Trump promises to impose even higher customs duties on Chinese imports after taking office, with the risk of blocking a crucial engine of growth in the world’s second largest economy, already burdened by a persistent real estate crisis and slowing consumption.
“No winner”
“Customs wars, trade wars and technology wars go against historical trends and economic rules, and there will be no winner,” Xi Jinping responded, according to state television CCTV. He said this during a meeting with the heads of several multilateral financial institutions.
This statement from the Chinese president comes shortly after the release of official data showing continued growth in Chinese exports in november. According to data in dollars released by Chinese customs,overseas sales of products and services increased by 6.7% on an annual basis: an increase that is still solid, even though lower than the forecasts of analysts interviewed by Bloomberg (+8.7 %) and well below the October performance. (+12.7%).
The resistance can be explained in part by foreign companies stockpiling in the face of the prospect of an imminent increase in US tariffs. This forecast “predicts an acceleration of exports in the coming months”, underlines Zichun Huang, economist at Capital economics.
Foreign trade has been one of the few luminous spots for China’s under-pressure economy again this year: It’s “one of the main reasons why China should reach its growth target of around 5%,” says economist Lynn Song by ING. Xi Jinping said on Tuesday that his country retains “full confidence” in its ability to achieve its 2024 growth target.
Beijing wants to strengthen its recovery
The expected escalation of trade tensions with Washington worries Beijing, which this week received the leaders of the main multilateral economic organizations. The global economy is facing growing challenges due to a trend towards “deglobalisation”, Premier Li Qiang warned on Monday. Eager to take the lead, the Chinese government unveiled a series of measures in November to stimulate trade, including extending export credit insurance and facilitating cross-border trade deals. Since Donald Trump’s first term,however,China has reduced the share of its exports to the United States,possibly reducing the impact of a new trade standoff. “Demand from other destinations is expected to remain relatively stable and may help offset some of the impact,” confirms Lynn Song.
However, in November the Asian giant recorded a new unexpected drop in imports, a barometer of still lackluster domestic consumption. Chinese imports fell 3.9% year-on-year in dollar terms, according to customs data released Tuesday, deepening the decline seen in October (-2.3%) and reversing the slight 0.9% recovery forecast by markets.
Faced with this gloomy situation, which a customs war could further obscure, the Political Bureau of the communist Party, the key organ of power, opened the way on Monday for “an appropriate easing of monetary policy” and promised “a favorable to the budget”. . -active”. “A recovery in import volumes is expected in the short term thanks to an acceleration in public spending which will stimulate demand for industrial raw materials,” estimates Zichun Huang.
The Central Economic Work Conference, a crucial meeting that Beijing is preparing to kick off, could lay the groundwork for new recovery measures this week. These are highly awaited signals from economic circles, disappointed in recent months by the lack of direct financial support for families to encourage them to consume. Despite everything, “it is likely that this conference will leave people disappointed, because the concrete measures to be announced would be few”, Teeuwe Mevissen, an economist at Rabobank, told AFP.
– How could increased tariffs on Chinese imports affect U.S. consumers and businesses?
Interview between Time.news Editor and Dr.Emily Zhang, Economist and China trade Expert
Time.news Editor: Thank you for joining us today, Dr. Zhang.As we look ahead to the potential return of donald Trump to the White House, what are your thoughts on his promise to impose even higher customs duties on Chinese imports?
Dr. Emily Zhang: Thank you for having me! Trump’s promised increase in customs duties could indeed reshape the economic landscape. During his first term, we saw significant strains in U.S.-China relations, primarily centered on trade issues. Elevating tariffs again may not only impact trade balance but also could further complicate the already tense relationship between the two largest economies.
Time.news Editor: What do you foresee as the immediate effects of such policies on China’s economy, particularly given the current challenges it faces?
Dr. Emily Zhang: That’s a great question. china is grappling with a real estate crisis and slowing consumer demand,so any addition of tariffs could hinder economic recovery. the trade war essentially acts like a double-edged sword; while it aims to address perceived injustices in trade practices, it could further exacerbate vulnerabilities in an already limping economy.
time.news Editor: President Xi Jinping recently stated that “there will be no winner” in a customs or trade war. How significant is this assertion in the context of economic theory and past precedent?
Dr. Emily Zhang: Xi’s statement echoes a fundamental principle of economic theory—that trade wars typically harm all parties involved, leading to reduced economic growth and increased prices for consumers. Historically, we’ve seen that nations engaging in protectionist policies often face retaliation, which leads to a cycle of economic detriment. Therefore, Xi’s caution may stem from both an awareness of these patterns and the recognition of china’s recent export growth, which could be jeopardized by further trade hostilities.
Time.news Editor: You mentioned the growth in Chinese exports. How does this continuity in exports play into the current narrative of trade tensions, especially with recent economic analyses?
Dr. Emily Zhang: Yes, the continued growth in exports signifies an underlying resilience in China’s economy, despite external pressures. It suggests that some sectors are adapting well, but this momentum might not hold if tariffs increase significantly. Recent data indicate that China is still able to find markets and maintain production; though, sustained trade wars could overshadow these gains and hinder long-term prospects.
Time.news Editor: If you could make a policy advice to both the U.S. and China amidst these looming tensions, what would it be?
Dr. Emily Zhang: Both nations would benefit from returning to the negotiation table to discuss reforms collaboratively rather than unilaterally imposing tariffs. Open dialogues focusing on intellectual property rights, trade imbalances, and technological exchange would pave the way for a more balanced relationship. Proactive engagement often yields mutually beneficial outcomes.
Time.news Editor: Understanding the potential implications of these policies is crucial. Thank you for sharing your insights, Dr. Zhang. this will certainly provide our readers with a deeper understanding of the current economic landscape between the U.S. and China.
Dr. Emily Zhang: Thank you for having me. It’s been a pleasure discussing this significant topic with you!
