This is a clear tactic that can easily aggravate trade tensions; China says it’s planning to increase exports even at a time when the world market has become apprehensive about the high volume of cheap Chinese products. During a press conference in Beijing on Friday, Wang Shouwen, the head of China’s delegation to the international trade talks and vice minister of commerce, explained to the media how the government is prepared to underwrite their exporting companies with credit and political backing. This is an initiative that was undertaken at a time when China’s rocketing shipment triggered trade tariffs and barriers from many countries.
This is the Chinese government’s plan: leading domestic shipping companies to expand their cargo transports and boost e-commerce. This action can be regarded as a direct reaction to some losses that Chinese exporters have experienced in the world market. They report unprecedented resistance due to some complaints, such as market saturation and unfair competition. As a result, doubling the growth of exports indicates that Beijing is more interested in economic gains than diplomatic consequences.
The increase in exports has occasioned some concerns among China’s counterparts, many of whom are yet to recover from the shocks that followed disruptions in the global economy. The United States, the European Union and some others have already placed a number of trade sanctions on Chinese products on grounds of subsidies, dumping and IPR. Currently, this latest announcement from Beijing could well cause trade partners to step up pressure on China with regards to its trade policies which could still result to protectionism.
This is especially timely given that world markets are beginning to look at a possible supply glut in the oil market in 2025. The IEA said that oil demand decline from China could cause a glut of over one million barrels per day next year. This forecast shows the important impact of the decision made in Beijing suggesting a great connexion between Chinese policies and the world economy.
It is equally worth noting that China has significantly stepped up efforts to enhance exports at a time when China’s domestic economy is gradually decelerating, not to mention trade friction between China and key trade partners. This increase in car exports by China may well represent a bid by the Chinese government to help support their domestic economy while keeping up their stranglehold on the manufacturing export market. Nevertheless, it will put more pressure on international relations and may lead to the unleashing of countermeasures by other countries, which can feel the strengthening of China and the invasion of its goods.
Support for exporters is part of a range of steps Chinese authorities undertake to sustain its economic growth rate, which is one of the fastest-growing economies in the world. Therefore, despite the recent opening up of the Chinese markets and less reliance on exports to fuel the economy, exports are still an essential cog in China’s economy. The weak response of exporting firms to the survey shows the government’s commitment to subsidizing this sector to ensure that the nation sustains economic progress and global power.
As China strives to realize the policy of export-oriented economy and development, it will attract global attention to market-frustrated or non-equitable acts. However, Chinese policymakers will be faced with the dilemma of trying to balance the promotion of domestic economic interests while at the same time recognizing the importance of good international trade relations. The next few months could thus witness more China consultations initiated by China’s trading partners or otherwise with the aim of addressing the grievances and arriving at an agreed new trade order.
