China’s response to US definitions is likely to focus on motivation and trade

BEIJING – China’s response to the new US definitions is likely to focus on home motivation and enhance relations with commercial partners, according to analysts stationed in Greater China.

Hours after the American President Donald Trump An additional tariff was announced by 34 % on China, the Chinese Ministry of Commerce He called on the United States to cancel the definitionsHe pledged unlimited counter measures. the We are invaded by the United States policy He also slapped new duties on the European Union and the main Asian countries.

Chinese exports to the United States have already caused 20 % in an additional tariff, raising the total rate of shipments from China To 54 %Among the highest imposed by the Trump administration. The effective rate of individual production lines can vary.

However, as was the case, the closing line Chinese statement It was an invitation to negotiate.

“I think the concentration of China’s response in the short term will not be revenge definitions or such measures,” said Bruce Bang, Associate Professor of Cuhk Business College. This is according to the translation of CNBC for the Chinese language statement.

Instead, Pang expects China to focus on improving its economy by diversifying export destinations and products, as well as doubling its priority Promote local consumption.

China, the second largest economy in the world, has risen since September of motivation efforts by expanding the financial deficit, and increasing the consumption support program and calling for the suspension of real estate decline. It is worth noting that Chinese President Xi Jinping held a rare meeting with technology entrepreneurs, including Ali Baba Jack found in February, in a private sector support.

“The reflection of politics – from the tightening of organization in recent years – reflects how Beijing was” expecting the upcoming slowdown or even the collapse of exports, “said Larry Ho, the Chinese chief economist in Macquari, in a report. To “launch a huge organizational campaign.”

“My point of view remains the same,” said in an email on Thursday. “Beijing will use home motivation to compensate for the impact of definitions, so that they can achieve the growth goal of” about 5 %. “

Instead of a revenge tariff, HU also expects Beijing to focus on continuing to use black and export controls on critical minerals and investigations in foreign companies in China. It is also expected that China will keep the yuan strong against the US dollar and resist calls from retailers to reduce prices – as a way to push the pressure on the United States.

Senior leaders in China announced in early March that they will follow a target of about 5 % of growth in GDP this year, a task they confirmed to require.Very hard workTo investigate. The Ministry of Finance also glimpsed Increase financial support if necessary.

About 20 % of the Chinese economy depends on exports, according to Coldman Sachs. They previously estimated that the new US definitions of about 60 % on China will reduce the real GDP by about 2 percentage points. The company still maintains full expectations of GDP by 4.5 %.

The ten members of the Association of Southeast Asian countries (Asia) joined China, Japan, South Korea, Australia and New Zealand in forming the largest free trade bloc in the world – Comprehensive regional economic partnership (RCEP) – which appeared in early 2022. The United States and India are not members of RCep.

“RCEP member states will deepen trade relations naturally with each other,” said Yi Soo, the main economist, China, in the Economic Intelligence Unit, in a memorandum on Thursday.

“This is also due to the fact that the Chinese economy is likely to remain more – or at least among the most – relatively, given the government’s strong commitment to its growth and willingness to spread financial policy measures when needed,” she said.

He said last week that the United States could reduce its definitions on China to help close a deal for its Beijing headquarters Letedance to sell US Tiktok operations.

But the level of new definitions in China was Worse than many investors expected.

“In contrast to some optimistic market expectations, we do not expect a big deal from the United States of China,” Ting Lu, Chinese chief economist in Nomura, said in a memorandum on Thursday.

He said: “We expect that tensions between these two huge economies will greatly worsen, especially since China was taking great steps in high -tech sectors, including artificial intelligence and robots.”