Since Donald Trump won the US election, China’s concerns about the faltering economy have increased further. Currently, China is making every effort to improve its economy. In such a situation, Trump’s election victory may ruin China’s master plan. Since the election campaign, Trump has promised to impose higher tariffs on goods imported from China. In such a situation, hopes are high that Trump could impose tariffs of up to 60 percent on Chinese goods in his second term. If this happens, then Trump’s decision may prove economically detrimental to China.
After Trump’s victory, fear of this began to appear in China. On Thursday, when asked about Trump’s possible decision to increase tariffs on Chinese goods, the Chinese Foreign Ministry said the trade war will benefit no one.
China’s growth rate has slowed since Corona. In such a situation, if China wants to become a superpower, it will need to strengthen it as soon as possible. Chinese President Xi Jinping has also initiated efforts to improve the economy. After the onset of Covid, that is, since four years, many sectors, including real estate, are facing a recession in China. The government debt is increasing and with it the unemployment rate in the country is also increasing.
During his first term, Donald Trump had imposed a tariff of up to 25 percent on Chinese goods. China analyst Bill Bishop says if Trump is talking about raising tariffs, then we should believe it. He can do that.
When Trump raised tariffs in his first term, it had a major impact on China. In such a situation, if Trump now increases tariffs to 60 percent as per his promise, that too at a time when China’s economy is faltering, then all this will become more worrying for China.
China’s situation has worsened since Corona
In China, strict restrictions were imposed during the corona period, due to which the pace of the economy deteriorated. After about two years, China relaxed its strict restrictions and took steps to improve the economy. Since then, China has been trying to make its economy like it was before Corona. The worrying thing for China is that despite efforts, China is not getting good news related to the economy. In such a situation, Trump’s arrival is like adding fuel to burning embers.
The International Monetary Fund (IMF) has also lowered its annual development target for China. The IMF expects China’s economy to grow 4.8 percent in 2024, which is at the lower end of China’s target of “around 5 percent.” The IMF estimates that China’s annual growth rate will fall further to 4.5 percent next year.
It is not easy for China to get out of the crisis
In 2017, Chinese President Xi Jinping said his country now wants to focus on quality development rather than accelerated development. China, famous around the world for selling things cheap, plans to shift its economy toward advanced manufacturing and green industries. In such a situation, some economists say that China will not be able to easily get out of the crisis.
China, long known in the world for its low-cost products, is now trying to repeat the same success with high-tech exports. China is already a world leader in the manufacturing of solar panels, electric vehicles (EVs), and lithium-ion batteries.
According to the International Energy Agency (IEA), China’s share in the world’s solar panel production is around 80 percent. Along with this, it is also the largest manufacturer of electric vehicles and the batteries that power them.
Of course, China is a big exporter of this sort of thing, but Katrina L, research director at Moody’s Analytics, says the problem now is that many countries, including Europe and the United States, that import this stuff, are reducing their purchases. .
This may also be China’s biggest concern. In such a situation, if Trump comes and increases tariffs further, then China will have to ask itself if the efforts it is making to get the economy back on track will be enough.
