China floods the world with cheap exports after the introduction of tariffs in the US. Beijing also uses diplomacy and economic threats to prevent countries in retaliation. TASR informs Bloomberg.
- China has increased exports to India, Africa and Southeast Asia.
- This increase disrupts the domestic industry of other countries and raises concerns.
- Mexico introduced duties on Chinese products to face dumping.
- Some countries hesitate to act against China for business negotiations.
- China uses foreign diplomacy to prevent retaliatory measures.
The Chinese economy’s export engine has not stopped in five months of high US duties. After restriction of access to the US market, exports to India achieved a historical maximum in August, supplies to Africa are on their way to the annual record and sales to Southeast Asia overcame the peak from the pandemic period.
Impact on foreign markets
This area increase raises concerns abroad. Governments are considering potential damage to the domestic industry compared to the risk of hosting Beijing, the largest business partner for more than half of the planet. Only Mexico, which introduced tariffs up to 50 % on Chinese products, including cars, car parts and steel. Other countries are under increasing pressure to act.
In the past few weeks, the Indian authorities have received 50 requests to investigate dumping for goods from abroad, including China and Vietnam. Indonesia promised to monitor the flood of goods after the viral videos of Chinese dealers promoting goods at extremely low prices caused outrage.
Concerns about the pressure on the duties
However, the chances of more meaningful steps are limited. Countries that negotiate with US customs duties seem reluctant to wage another trade war with the world’s second largest economy. “A subdued reaction is probably influenced by ongoing US commercial negotiations,” said Christopher Beddor of Gavekal Dragonomics. “Some countries do not want to be perceived as contributors to the disintegration of the global trading system. Some may detain duties against China to offer them as US concessions during their own business negotiations,” he added.
Beijing uses diplomacy and economic threats to prevent countries in direct retaliatory measures. Earlier this month, Chinese President Si Jin-Pching called on the BRICS (Brazil, Russia, India, China and South Africa, to which Egypt, Ethiopia, Indonesia, Iran, the United Arab Emirates and Saudi Arabia) to create a single voice against protectionism. Meanwhile, the Ministry of Commerce in Beijing warned Mexico to “change his mind twice” before it starts to act, as his steps will have consequences.
American pressure on duties
Donald Trump, who is pushing NATO countries, also contribute to the risks to introduce tariffs up to 100 % to China for its support for Russia. If other countries are tempted to join China, it will make it difficult to solve the internal problems of Beijing, such as the fall in the real estate market and the aging population.
While Chinese exporters resist adverse conditions, a sharply growing business does not make them richer. It does not help to solve home problems. Profits of industrial companies fell by 1.7 %in the first seven months of the year as they lowered prices to sell more abroad.
The commercial voltage continues
The growth of exports could also undermine the efforts of Beijing to balance its economy towards stimulating domestic consumption. President Si Jin-Pching, however, plays it into carats. It can show the US that China does not need an American consumer, which strengthens its position before meeting Trump at a summit in South Korea. The world’s largest economies are still negotiating a possible trade agreement, with a 90-day pause to reduce mutual duties by 115 % expire in early November.
