**Beijing**: As tensions rise in the escalating trade war with the United States, Chinese officials promote a narrative of economic resilience, forecasting strength against tariffs and asserting a commitment to long-term strategic goals despite increasing pressures on the domestic market and external economic challenges.
Amid escalating tensions in international trade, China has asserted a strong position against the backdrop of an ongoing trade war with the United States, which threatens broader economic repercussions globally. Despite fears of a potential recession and economic adversity, Chinese officials are promoting what they describe as “economic resilience,” suggesting their readiness to withstand increasing tariffs.
The trade conflict between the United States and China has grown more intense in recent months, with the U.S. implementing significant tariffs on Chinese imports that have surged to 125%. In response, China retaliated by raising tariffs on American goods to 84%. Orville Schell, director of the Center on U.S.-China Relations at Asia Society in New York, called the situation a “monumental train wreck breakup,” reflecting concerns that the intricate economic fabric developed over decades is unraveling.
This latest escalation followed U.S. President Donald Trump’s initial announcement of wide-ranging tariff increases, which were aimed at numerous countries. However, following criticism from his own party and a discernible sell-off in global financial markets, Trump introduced a pause on these tariffs for countries willing to engage in negotiations, a strategy that U.S. Treasury Secretary Scott Bessent characterised as intended to prompt discussions. According to Bessent, over 75 countries have already expressed interest in seeking agreements with the U.S., further demonstrating the complexity of the trade landscape.
In stark contrast, China’s situation has been complicated by the hefty tariffs imposed by the U.S. As cited by Bessent, Trump’s decision to escalate tariffs on Chinese imports was met with corresponding actions from Beijing. Despite the heightened tensions, Trump remains optimistic that an eventual agreement with China may emerge.
Inside China, there is a robust attitude of defiance toward the U.S. tariffs. Many experts and citizens regard Washington’s measures as specifically aimed at China independent of any actions taken by the Chinese government. Wu Lang, a Shanghai executive, expressed the sentiment that there is “no point and no room for China to retreat,” reflecting a strong nationalistic response to perceived external aggression.
Moreover, Beijing has communicated its intent to bolster its economic framework, with Zheng Yongnian, dean of the School of Public Policy at the Chinese University of Hong Kong’s Shenzhen campus, asserting the importance of cultivating an industrial system characterised by resilience in order to secure a long-term competitive stance against the U.S.
Keyu Jin, author of ‘The New China Playbook’, echoed the sentiment regarding China’s preparation for enduring economic strains, indicating that the tariffs afford Beijing a rationale to accelerate stimulus measures, enhance technological capabilities, and solidify its economic standing.
China’s vast domestic market may provide a potential buffer against the impact of U.S. tariffs, as export-focused industries increasingly pivot towards domestic demand in light of escalating trade tensions. Yao Yang, an economist at Peking University, acknowledged the challenges posed by the trade conflict but expressed confidence in the government’s ability to manage the situation.
Chinese Premier Li Qiang stated that measures are in place to tackle external economic shocks. While the implications for low-income populations remain a concern, officials have pledged to maintain basic living standards amid the ongoing pressures.
Long-term strategic objectives appear to underpin China’s approach in this trade dispute, with a broader aim to establish a leading position in the global economy irrespective of immediate challenges. A banker from Beijing noted that while short-term difficulties could arise in specific sectors, the overarching aim remains focused on pursuing the greater good.
In contrast to the Chinese framework, U.S. companies, particularly Apple, face considerable uncertainties due to tariffs. Apple’s market value has reportedly taken a significant hit following tariff announcements, prompting the company to explore options such as increasing shipments from India to the U.S. However, experts indicate that a swift shift away from manufacturing in China is impractical due to the established and extensive supply chains.
The U.S.-China trade war is also reshaping the global trade landscape, sowing uncertainty amidst other trading partners. Despite a temporary pause in tariffs on numerous countries, the future of trade policy remains unpredictable, stimulating tech suppliers to reassess their strategies towards countries with more favourable tariff conditions.
Lynn Song, chief economist for Greater China at ING, summarised the scenario as a test of endurance, suggesting that China is betting on its capacity to absorb economic challenges and its focus on long-term objectives to outlast the current trade conflict.
Source: Noah Wire Services
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