According to Trump's rates, China floods the world with cheap exports. Risks of global crisis
Although the Trump administration has imposed record taxes on Chinese imports, China's export has not slowed down. On the contrary, Beijing managed to redirect its goods to other markets, approaching a commercial surplus of $ 1.2 trillion, notes Bloomberg.
India, Africa and Southeast Asia, new markets
American restrictions forced Chinese companies to look for customers elsewhere. And they found them quickly. In August, India imported from China to a record level. Exports to Africa are approaching the largest annual value in history, and deliveries to Southeast Asia have exceeded the volumes reached in pandemic.
This commercial offensive raises question marks globally: governments try to protect their industries, but hesitate to directly provoke Beijing-the main commercial partner for more than half of the world's economies.
State reactions: caution and hesitations
So far, only Mexico had the courage of an open confrontation, announcing rates of up to 50% for Chinese steel imports, car parts and vehicles. India initiated antidumping investigations, and in Indonesia the authorities promised strict monitoring after the public space circulated with Chinese jeans sold for just 80 cents.
Instead, South Africa has given up the idea of taxing Chinese cars, preferring to attract investments. Chile and Ecuador have introduced punctual taxes, and Brazil, although threatened with restrictions, allowed the Byd giant to expand the production of electric cars without customs barriers.
Beijing responds with pressure and warnings
China does not stand with her hands in her breast. Xi Jinping has asked BRICS states to form a common front against “protectionism”, and Chinese diplomacy has warned Mexico that it will bear serious consequences if applied rates.
On the other hand, Donald Trump presses NATO allies to adopt up to 100% on Chinese goods, invoking the support given by Beijing Russia.
China's economy: record export, declining profits
But behind the spectacular figures, vulnerabilities are hidden. In the first seven months of the year, the profits of Chinese industrial companies decreased by 1.7%. To get rid of the surplus of production, Beijing encouraged the reduction of prices, which aggravated deflationary pressures – the most serious of the late 1970s.
Economists warn that this “wave of exports” could undermine the plans of the Communist Party to stimulate internal consumption. The US is asking China to emphasize its own market, and the theme will be discussed at the next meeting of the party leadership.
“China Shock 2.0”: between the global market and internal fragility
The analysts called the current “China Shock 2.0” phenomenon. The excess of Chinese products threatens millions of jobs in emerging states, but also shows the impossibility of isolation from the world factory.
Despite commercial barriers, China is constantly finding new markets – from India and Australia to Europe, where exports of electric cars have reached $ 19 billion this year only. The deposit of Yuan and the relaxation of the US monetary policy make Chinese and more competitive goods.
“China proves that she knows how to conquer new markets and defend her positions in global trade”, Comments Adam Wolf, an analyst at Absolute Strategy Research.
At this moment, a temporary break works between Washington and Beijing: the rates of up to 145% are suspended for 90 days. However, before the meeting between Xi Jinping and Donald Trump in South Korea, the commercial tension deepens.
