After Donald Trump first entered the White House eight years ago, embattled Chinese leaders responded forcefully with his tariffs and fiery rhetoric, resulting in a trade war that plunged relations between the world’s largest economies to multi-year lows. But delivered.
This time, Beijing is preparing for Trump’s return by deepening ties with allies, promoting self-reliance in tech, and setting aside funds to prop up the economy, which is now already vulnerable to new tariffs threatened by Trump. Is more sensitive to.
While some retaliation over those moves may be inevitable, experts say China will focus on exploiting the rift between the US and its allies, and helping reach a quick deal to soften the blow from trade frictions. Will aim to reduce the temperature.
Zhao Minghao, an international relations expert at Shanghai’s Fudan University, said China would probably not repeat the strategy of Trump’s first presidency, when Beijing reacted very strongly to Trump’s moves on tariffs.
He pointed to Chinese President Xi Jinping’s message to Trump on Thursday, in which Xi called for “cooperation” not “confrontation” while emphasizing “stable, strong and durable” relations between the two superpowers.
“Trump is no stranger to Beijing at this point,” Zhao told Reuters. “Beijing will respond in a measured manner and will attempt to communicate with the Trump team.”
While Chinese tech giants are now much less dependent on US imports, the economy – hit by a massive asset crisis and plagued by unsustainable debt – is in a weaker position than in 2016, achieving growth of 5% compared with 6.7% then. Is struggling for.
To make matters worse, Trump has promised to end China’s most-favored-nation trade status and impose tariffs of more than 60% on Chinese imports – far higher than those imposed during his first term.
Fudan’s Zhao said Beijing has dealt with this scenario, but expects the tariffs to fall below the level set during the campaign because “that would significantly increase inflation in the US”.
Still, that threat alone has unsettled producers in the world’s largest exporter because China sells more than $400 billion of goods to the U.S. a year and replaces hundreds of billions of dollars worth of products Americans buy elsewhere. Sells more goods.
As a result, the Chinese economy may need even more stimulus than the $1.4 trillion expected on Friday, said Li Mingxiang, a scholar at the Rajaratnam School of International Studies in Singapore.
“This would be a very serious blow to China’s international trade that would affect jobs and government revenues,” Li said. “China will probably have to come up with a much larger stimulus package domestically.”
charm offensive
To boost global trade, China is launching diplomatic offensives, strengthening alliances, setting aside differences with enemies, and continuing tough negotiations with the EU, even That’s even after the bloc imposed harsh tariffs on Chinese electric vehicles.
Last month China ended a four-year military standoff with India along their disputed border; In August, it settled a two-year dispute with Japan over the discharge of radioactive water from the Fukushima nuclear plant; And Prime Minister Li Qiang visited Australia in June – the first such visit in seven years.
Also last month, Xi and Li both attended separate summits of the BRICS – which now account for 35% of the global economy – and the 10-state Shanghai Cooperation Organization, as China deepens ties with the Global South. Is.
Editor-in-Chief Eric Olander said, “The first Trump administration did not show much interest in stronger engagement in Africa, Latin America, and Southeast Asia, giving China the opportunity to operate largely unopposed in these markets.” Head of the China-Global South Project.
In Europe, some experts say trade tensions with China could be balanced by Trump’s potentially diminished role in the Ukraine war and concerns over his economic policies, paving the way for Beijing.
“China will not only try to drive a wedge between the US and countries to the north, but also reach out to the Europeans, the British, the Australians and even the Japanese,” said Hong Kong expert Jean-Pierre Cabestan. Baptist University.
“But it is also part of its mission to rebalance its foreign trade in favor of the Global South,” he said.
tech punchline
During the first trade war, Trump banned high-tech exports to China and sanctioned companies including SMIC, China’s largest chipmaker, prompting its tech sector to become more domestic-focused and self-reliant.
Winston Ma, former managing director of China Investment Corporation (CIC), China’s sovereign wealth fund, said a major reason for the change was Trump’s ban on the sale of components to Chinese telecommunications firm ZTE in 2018.
“It was really scary from China’s perspective, so they started preparing. This was the beginning of that kind of defensive thinking,” Ma said.
Soon after, Xi urged the nation to promote self-reliance in science and technology, and pushed China to build critical industries, including AI and space.
The result: Eight years ago, China had only four government procurement projects worth more than $1.4 million that replaced foreign hardware and software with domestic alternatives. Data shows that this year this number has increased to 169.
Despite these advances, chipmakers “are definitely feeling the pressure – these Chinese companies couldn’t supply global customers and couldn’t have access to the latest chips,” Ma said.
Nazak Nikkhtar, a Commerce Department official under Trump who knows his advisers, said he expected Trump “to be more aggressive about export control policies toward China.”
She hoped for “a significant expansion of the Entity List”, which imposes export restrictions on listed companies to catch their affiliates and trading partners.
Ma, a former CIC executive, said the sanctions would have an impact for some time as the US expands the sanctions regime to foreign suppliers.
“I think the punchline is that the coming years are the most critical for this US-China tech rivalry.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
