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The working worker works at the production enterprise seminar in the Economic Development Area Tingzhou in Tsinzhou, Shandong, China, May 10, 2025.
Costfoto | Nurphoto | Gets the image
Forget about the factory lines for socks, sneakers and T -shirts. US President Donald Trump wants to increase internal Production of high -tech productsAnd not clothes and shoes, he told reporters on Sunday.
However, China doubles its efforts to strengthen the advanced production, which can put both countries to the course of the collision.
Last week, Chinese President Xi Jinping confirmed his growth plans under the direction of the Northern Henon province, coming forward with a strategy that has long criticized the US and major trading partners to deepen global trade imbalances.
Si told workers at the state factory that carries the ball, that independence in advanced production is “the right way” for China and the “basis” of its economy, reports an an official statement.
Contribution to the production sector More than 25% of China’s GDP in 2023According to the World Bank. While Chinese pressure on expanding its production capabilities is part of its goal of achieving independence, especially in high -tech sectors, it can withstand the main requirements of the Trump administration in permanent trade negotiations, experts warn.
Trump wants China engaged in trade imbalance and crash into Beijing for providing state subsidies to Chinese companies that distorted competition.
However, China has a “small volume” for China to plunge and scale its production strategy that is closely linked to Beijing’s desire for independence, said Alan von Meren, Chinese economist in Danske Bank.
“I am not too optimistic about the big business between the US and China,” Meren said, expecting that the tariffs for Chinese goods make up about 40%.
A “Made in China 2025” A ten-year plan, published in 2015, two years after SI came into force-booked China into a leading high-end manufacturer: from electric vehicles and commercial planes to semiconductors and robots.
Center for Strategic and International Studies Estimated in Report 2022 What costs in China in financing, contributing to the industry, made at least 1.73% of their GDP in 2019, which is much higher than in the US, which spent 0.39% of its GDP on industrial support in 2019.
These include direct grants and tax benefits to their whole sectors, almost all large, listed Chinese companies that receive some form of state subsidies, according to the economic consulting firm Rhodium Group.
Despite support, China missed several key goals From its ten -year plan, including for aerospace and high -class robots, and also contributed to unhealthy industrial competition that has aggravated world trade tensions, the European Chamber of Commerce in China reports.
Trading balance is unlikely
US Finance Minister Scott Infant CNBC in an interview with CNBC at the beginning of this month was optimistic to reach the middle ground with China: “We need more production, they need more consumption, so there is an opportunity to balance it together, we will see if it is possible.”
But it remains unclear whether he will make a priority during the current trade negotiations with Beijing as part of a 90-day trading truce.
The US trading deficit with China is unlikely “significantly”, Jing van, Chinese economist Nomura, and the team notes in the note. They expect Beijing to reduce its dependence on US imports and for American manufacturers will take years to change production on the shore and find the right alternatives.
“Since the US is the most lively consumer market worldwide, the sudden floods of cheap Chinese goods in the rest of the world inevitably cause a global reaction,” Van added.
The firing of anxiety
The permanent industrial impetus in China and exports is anxiety in the non -US markets and inviting fresh trade barriers.
As the ghost of US tariffs emerged earlier the year, Chinese toy manufacturers in the city of Iva, the production center, rushed to process the statuettes of Santa Claus with round faces and blue eyes in the hope of more European consumers.
But their search for new markets to compensate for the opportunities lost in the US.
“By the end of this year we need to observe, it is not only the US tension, it will be increasingly tension in the EU … And it will no longer be just about electricity (but) in general a wide range of different products,” Marra added.
High Finance officials from the G7 countries led by the United States convened last week to discuss steps to resolve the capacity and unjust trading practice – “with a clear purpose of stopping China’s export saturation,” said Wang Deng, director of China at Eurosia Group.
These steps can still be interpreted in Beijing as a “intentional provocation” and propose to use other ways of creating headaches for foreign business that are looking at the Chinese market.
“Delayed licensing, exceptions from local stimulation schemes or tougher supervision may follow when tension in other areas of bilateral relations,” Van Eurasia said.
According to Leah Fahi, Chinese economist in China’s capital, China, Chinese production.
For example, in recent years, India’s share in world exports to furniture, toys and games stagnated and the export of clothing decreased. China has expanded its advantage over these goods over the same period.
India. Vietnam and Indonesia They imposed various protectionist measures to provide some relief for domestic manufacturers from intense price competition, especially in the sectors that face excess, cheap imports.
Given this, some claim that excessive Chinese power may offer a silver lining for tired inflation economies by softening the pressure on prices.
“China will export deflation to the rest of the world,” said Marra, noting that for the markets with a limited production base, like Australia, cheap Chinese imports can ease the crisis of life and help reduce inflation pressure.
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No easy fixes
Economists at home and abroad urged Beijing to move to a model led by consumption and reduce dependence on the strategy, which is widely accused of deepening deflation in the economy.
Chinese customs data in April offered a fresh reminder of the imbalance between China’s production and its domestic demand. Its surplus trading reached a record high of $ 992.2 billionDemanded with sustainable imbalances with major partners, including the United States, the European Union and the Southeast Asia.
The Chinese leadership has strengthened its support by seeking Distract American goods sell internal consumers. But convincing consumers, caution in income and job prospects, to spend again as a difficult task.
China retail sales In April, the growth slowed down to 5.1%, the disappeared expectations of economists, and the sales of cars were far behind, increased only 0.7% compared to a year earlier, compared to 5.5% jump in March.
Transition in Beijing to more model under the guidance of consumption see “very slow impetus reform”,-said Louise Louise, a leading economist in the Oxford economy, predicted consumption to take into account half the Chinese economy only up to the middle of the century, which is much lower than 70% of the shares observed in the US
However, the focus of the XI on production is not completely unjustified, as Washington will probably retain solid capture, limiting Beijing’s access to more advanced technologies.
“The Trump administration, considering China as the most powerful enemy, will make the yard higher and the fence above,” Van-Nomura said. The “small yard, the high fence” was a strategy adopted by the Baden administration aimed at protecting a narrow set of critical technologies (a small yard) with rigid and wide restrictions (high fence) while maintaining normal economic exchange in other fields.
“The strategic interchange remains inevitable in national security issues,” Van added.
– Evelyn Chen in CNBC contributed to this story.
