BEIJING – Chinese President Xi Jinping cautioned on December 10 that a trade war with the United States would yield “no winners,” emphasizing the need for cooperation as tensions between the two nations escalate. His remarks come as President-elect Donald Trump prepares to take office in January, pledging tougher measures against China, including higher tariffs.
“Tariff wars, trade wars, and technology wars go against historical trends and economic rules, and there will be no winners,” Xi said during a meeting with heads of multilateral financial institutions in Beijing, according to state broadcaster CCTV.
He reiterated China’s willingness to engage in dialogue with the US, aiming to expand cooperation and manage differences to stabilize bilateral relations.
Economic Challenges Persist
China is targeting approximately 5% economic growth for 2024 despite ongoing struggles with weak domestic consumption, high unemployment, and a prolonged property sector crisis. Xi expressed confidence in achieving this goal despite the hurdles, bolstered by resilient export performance.
However, recent trade data revealed slower-than-expected growth. Exports in November rose 6.7% year-on-year to $312.3 billion, falling short of the 8.7% forecast and significantly down from October’s 12.7% surge. Imports shrank 3.9%, marking a steeper decline than anticipated, underscoring subdued domestic demand.
Economists attribute the rise in exports partly to foreign buyers stockpiling goods ahead of potential new US tariffs. However, analysts warn that this momentum may fade unless trade negotiations yield unexpectedly positive outcomes.
Policy Outlook for 2025
Chinese leaders are convening in Beijing this week to finalize the country’s economic plans for 2025. The Politburo has already called for “vigorous” support for consumption and more flexible monetary policies, though specific measures have yet to be announced.
Zhang Zhiwei, chief economist at Pinpoint Asset Management, expects further clarity in upcoming meetings, particularly regarding fiscal policies aimed at bolstering domestic demand.
As China navigates these economic challenges, the looming threat of a renewed trade war with the US adds another layer of uncertainty to its recovery efforts.