China’s Premier, Li Qiang, condemned the United States’ aggravation of the situation by raising tariffs even further. He claimed that these tariffs have provided a “devastating punch” to the global economy. At a Shanghai Forum in Beijing, the chief economist of the Asian Infrastructure Investment Bank made his statements, addressed to delegates from leading global institutions. These were the International Monetary Fund, the World Bank and the World Trade Organization.
Li’s comments come in the wake of a record-shattering increase in China’s trade surplus, which topped $1 trillion as of November. This remarkable figure emphasizes the depths of our insidious trade relationship with China. Or more precisely, Chinese exports to the U.S. have tanked. Furthermore, in November, exports to the U.S. fell dramatically by 29% from last year. This decrease is the eighth consecutive month of declining numbers.
“Starting from the beginning of this year, we’ve seen the stick of tariffs being wielded around the world with growing restrictive measures on the economy and trade, which have dealt a severe blow to the global economy,” Li stated at the forum. He focused on tariff-related trials – some still emerging. As the harmful effects have become more apparent, there is louder opposition for continuing free-trade-type policies.
Some economists, at least, are still betting on a V-shaped recovery for China’s economy. They project it will exceed the official target of just under 5% for 2025, driven by vigorous exports to worldwide markets. Tariffs and other retaliatory policies have put a damper on Chinese exports to the U.S. China has easily made up for these losses by increasing shipments to other countries.
Li said that despite a noticeable slowdown in China’s overall investments, investments in technology are significantly increasing and have started to exceed the growth rates of total investments. He furthered the idea of “collaborative innovation” between countries, highlighting the importance of an open-minded spirit in building partnerships and cooperation. “We need to embrace an open mind and work hand in hand to pursue openness and cooperation,” he urged, highlighting the importance of international collaboration in navigating current trade tensions.
The recent months saw a breakthrough in the China-US trade tension, the friction has been substantially relaxed. This change came after talks between then President Trump and Chinese President Xi Jinping in late October. The two countries agreed to withdraw their earlier steps. They reached consensus to continue their moratorium on retaliatory suits against one another for an additional year.
Challenges remain. China’s economic growth accelerated to 4.8% in the most recent quarter. This increase represents the slowest rate the nation has experienced in the past 12 months. Those persistent trade deficits with the U.S. still loom large in China’s economic forecast.
