With the constant increase in tariffs American over Chinese imports earlier this year, Derek Wang braced himself for major disruptions.
With orders from the US halted, Wang, 36, who sells smart kitchen appliances in the province of Guangdongin southern China, looked for other alternatives to fill the gap.
After finding new buyers in Brazil, Japan, Malaysia and Cambodia, he learned what he describes as a fundamental lesson: “Nothing is more important than the markets near us.”
Stories like Wang’s were repeated throughout the country’s economy. Chinawhere companies, large and small, scrambled to fill the void left by tariffs that undermined exports Chinese for the American market.
The result was a masterstroke for the Chinese commercial giant.
Rather than see exports dwindle due to the loss of business with the US, the world’s largest manufacturer has pushed them further into other markets – taking advantage of its presence economic the country’s global outlook and the exchange rate protections that companies made during Trump’s first trade war.
This resilience gave Beijing confidence in negotiations that had been dragging on for months, which culminated in October, when leaders Donald Trump e Xi Jinping met and agreed to a truce that reduces new tariffs on Chinese goods to 20%.
But this initiative also puts China on track to overcome a massive global trade surplus of nearly $1 trillion last year – a balance that angered governments around the world and that, in the first place, triggered the guerra commercial the Trump.
There were already doubts about the sustainability of China’s export offensive even before data released last week showed that exports suffered an unexpected contraction of just over 1% in October, compared to the same period the previous year – the first drop since February.
China’s ability to maintain its level of exports to the rest of the world – and to expand again into the American market after the recent truce – is a crucial issue for the world’s second largest economy, which continues to face a demand weak of its own consumers, but which invests even more in the manufacturing sector as its economic base.
So far this year, the shift in China’s export flows has been dramatic – and sent a clear message that for China, the US is not irreplaceable.
While exports to the US fell nearly 18% in the first 10 months of this year compared with the same period in 2024, they rose more than 7% to the European Union, 14% to ASEAN (Association of Southeast Asian Nations) countries and 26% to Africa, according to Chinese customs data released last week.
Overall, exports grew 5.3%.
In Southeast Asia, this trade was driven by large increases in exports of machine tools, automotive parts, and computer components.
In Africa, construction machines and technologies verdes have been important exports, according to analysts, while parts of Latin America have recorded significant growth in vehicles electricalchemical and electronic fertilizers, among other areas.
This trade machine was in full swing before the trade war began.
Already considered a superpower manufacturing Globally, China’s rapid rise to dominance in green technologies such as electric vehicles, lithium-ion batteries and solar panels has boosted demand from countries seeking to convert to low-cost renewable energy – and the concern of those who accuse China of competition unfair with subsidized products.
“China has prepared very well for this,” said Jacob Gunter, who directs the think tank’s economics and industry program. MERICS in Berlin.
“It was no miracle of prediction to predict that the United States would, over time, intensify its trade and technology conflict with China, but China was already expanding its markets before the start of the trade and technology war, and since then, this trend has accelerated greatly,” he said.
Even as many companies have had to scramble to shift business away from the U.S. market in recent months, experts say the groundwork for the shift was laid by Beijing’s decades-long effort to expand its reach. presence economic global – expanding trade and financing ports, terminals and highways under Xi’s Belt and Road Initiative.
This also built on an earlier initiative by Chinese companies to move supply chains and production centers from China to areas of the Southeast Asian and the Mexico – where goods are sent from China to be manufactured or finished.
“This is the key to the so-called resilience of Chinese exports,” said Yao Yang, dean of the Di-shui-hu Advanced Institute of Finance from Shanghai University of Finance and Economics, who noted that these investments began during Trump’s first term.
“Without these overseas investments, I don’t think China will be able to deal with the shock.”
Mass resilience Beijing’s trade has also raised fears that a flood of Chinese products into other markets will wipe out domestic industries.
Countries have retaliated with investigations into Chinese products.
Os USA ea Indiaas well as Mexico and Brazil, together, initiated 79 lawsuits antidumping and compensatory measures against Chinese products in the first half of this year – a significant increase compared to years before 2024, according to data from World Trade Organization.
There are also calls for exports or factory relocation to be accompanied by greater levels of local investment, knowledge transfer and more balanced trade.
For some Latin American countries, “deindustrialization is a big problem when Chinese companies start to invest… because they only bring assembly, they don’t transfer technology and knowledge,” said Diego Rodriguez, leader of the logistics and industry area at Americas Market Intelligencea research firm in Miami, noting that countries like Brazil are reacting to this.
In Southeast Asia, the increase in the flow of goods is a cause for concern, according to Rebecca Sta Maria, former executive director of the secretariat of Asia-Pacific Economic Cooperation.
“We felt like we were being inundated. I remember one economy that talked about a ‘tsunami of Chinese products coming into ASEAN’. Of course that worries us,” said Sta Maria, current director of the Institute for Democracy and Economic Affairs in Kuala Lumpur.
But it wasn’t all negative, he added, as small and medium-sized companies were using high-quality components from China, making their products more competitive.
“I know the Chinese government has recognized (the concern) to some extent, so now the question is how do we deal with it?”
Beijing denies accusations that its products are flooding markets.
Instead, its officials have seized on Trump’s shake-up of global trade to highlight China as a reliable trading partner, while promising to further open its vast market to exporters and investors around the world.
Observers say some countries may also be unwilling to erect barriers to China at a time when they face higher tariffs on their own goods in the U.S. — especially when there is real demand in many countries.
In Africa, “it’s a two-way street,” said David Omojomolo, emerging markets analyst at Capital Economics.
“These countries (in Africa) want to industrialize… there is a huge gap in electricity supply across the continent – solar panels are cheap and China has spare capacity… they need to ship them somewhere, so of course Africa will benefit.”
Still, manufacturers across China have struggled to to fill in a lacuna left by the drop in US exports.
In recent months, factory workers have described to CNN shift cancellations, compulsory furloughs and job losses as a result of employers’ decision to relocate from China.
Seamstress Zhang Peipei from Jiangxi province told CNN who has managed to keep his 20-year-old business afloat thanks to small sources of income from outside the United States.
But she says unpredictable US tariff policies have already had a “severe and irreversible long-term impact” with no clear alternatives.
With his business now dependent on being able to close a deal with buyers in Mexico, Zhang said he didn’t feel “very confident” even with a possible return of some business with the US, “since the US has been shaking up the foreign trade scene, the whole world is in chaos right now.”
And there are questions about whether China’s robust trade data this year reflects real demand or a short-term strategy to move goods out of the country for storage or shipping to the U.S. through a third country with tariffs more you get off.
“Still, I’m not entirely confident that the final demand for all these (other) exports destined for Sul Global will actually remain in those countries,” he said, noting that exporters may also be building up inventories abroad as they wait for trade negotiations between the countries and the US to unfold.
“The big caveat,” he added, “is that Chinese exporters’ margins are almost certainly being squeezed… they are maintaining high volumes in real terms, but they are doing so by reducing prices.”
The recent truce between Xi and Trump keeps tariffs on Chinese products at around 47% on average, but could result in more American businesses returning.
But, as uncertainty persists in economy globalone of the main focuses in China, both in factories and the government, will be to expand the amount of domestically manufactured products that the country’s consumers buy.
That’s the case with Wang, the kitchenware manufacturer in Guangdong.
While he has gained new customers outside the US, he is also making another strategic shift, directing more business to the mercado internal Chinese and less abroad, he stated.
