Beijing is presented as the new guarantor of global trade. China exports not only the goods but also the deflation

While Washington declared his triumph again in the battle of customs duties, in Beijing the lines of another narrative were already drawn: that of a responsible China, which assumes the role of guarantor of global commercial stability.

On the same day that the US and China completed a framework understanding to mitigate the tariff conflict that lasts for years, Prime Minister Li Qiang was entering his world economic forum, also known as the “summer Davos”, with a clear message: in a derived world, China remains an an anchor.

“No country can thrive in isolation,” Li said, in a speech in which he invoked the 2008 financial crisis as a landmark of the current global anxiety. “China is ready to contribute with everything she can to help the world economy to overcome the difficulties.”

In parallel, on the other side of the globe, the US Secretary for Trade announced a note of satisfaction that a understanding meant to speed up Chinese rare mineral exports to the US. An agreement that, in the style already enshrined in the Trump administration, was first presented publicly, then partially confirmed with reserves on the Chinese side.

If the “release day” of the tariffs-as the US president called it-was more a break than a definitive victory, Beijing took this interval to strengthen his position. He resumed the dialogue with traditional US partners – Australia, Japan, the EU – and began to sell, successfully in certain circles, as a bastion of global commercial order.

Li Qiang also tried to respond to the increasing fears regarding a potential “export” of the Chinese internal crisis, especially through overproduction and industrial dumping. His message was a calm one: China wants to become a “superpower of consumption” internal, with emphasis on green technologies and industrial innovation.

The structural problems of the Chinese economy cannot be hidden

The official messages are carefully calibrated, but the structural problems of the Chinese economy cannot be hidden under the carpet of a festive speech. As Professor Eswar Prasad from Cornell University notes, between what Chinese factories produce and what the internal market is due to a considerable gap – one that risks reversing on the rest of the world.

And not just theoretically. In recent months, Brazil, Thailand and even the Moscow ally have raised new commercial barriers against imports from China, a sign that fears of a new wave of cheap Made in China are as real as possible.

In parallel, Beijing tries, with unequal results, to stimulate internal consumption. Campaigns such as the “618” festival, a feast of discounts and JD.com anniversary, have temporarily contributed. But tax policies remain tense: several local governments have suspended subsidies for home appliances, a sign that the budgets are on damage.

In the scenes, governmental analysts and counselors recognize: China exports not only the goods, but also the deflation. Price reductions in chain – from electric cars to electronics – are a direct consequence of industrial overcapacity. And even if the officials intervene – as it was in the case of the price war triggered by the byd – the substantive problems remain.

The agreements with the US, whether they and the provisionals offer Beijing a break. But not to give in, but to reform – at its own rhythm and in its own interest. In fact, the recently resumed negotiations between XI Jinping and Donald Trump – with stages in Geneva and London – are just the beginning of a process that promises to last years. And Beijing knows well that in this war of nerves, time is on the side of the one who does not rush.

For now, China plays the role of the rational actor, with a speech of stability and multilateralism. But under this mask there is a clear strategy: to transform vulnerability into opportunity and to capitalize on the chaos induced by the unpredictable policies in Washington.

As Zangyuan Zoe Liu, an expert in the global economy, “the greatest danger to China is not the war of tariffs, but its own economic demons.” And the stake is not only the trade, but also the ability of an authoritarian power to rewrite its story in an increasingly devoid world, notes WP.