Aircraft Corp. commercial company. Of China (Comac) C919 under assembly at the Comac Shanghai Research and Development Center on May 4, 2017.
Bloomberg Bloomberg Gety pictures
Forget the factory lines for socks, sports shoes and shirts. US President Donald Trump wants to boost home Production of high -tech productsNot clothes or shoes, and he told reporters on Sunday.
However, China doubles its efforts to enhance advanced manufacturing, which can put both countries in a collision path.
Only last week, Chinese President Xi Jinping again confirmed his plans for the growth led by manufacturing during the Mainian District visit, as it has been presented with a strategy that has long been criticized by the United States and the main trading partners to deepen global trade imbalances.
The eleventh workers told a factory carrying state -owned balls that self -reliance in advanced manufacturing is the “correct path” of China and the “backbone” of its economy, according to what he said a Official.
The manufacturing sector contributed to More than 25 % of GDP in China in 2023According to the World Bank. While China’s batch to expand its manufacturing capabilities is part of its goal of achieving self -reliance, especially in high -tech sectors, this can conflict with the basic demands of the Trump administration in continuous commercial talks.
Trump wants China to deal with commercial imbalances and criticized Beijing to provide a huge amount of government support to Chinese companies, and thus distort competition.
However, there is a “small field” of China to budge and expand its industrialist -led strategy, which is closely related to the Beijing engine for self -reliance, said Alan von Mehrin, a Chinese economist at Dansky Bank.
“I am not very optimistic about a big deal between the United States and China,” Mirren said, expected to hold tariff prices on Chinese goods in the United States about 40 %.
the “Made in China 2025” The ten-year plan, which was released in 2015-two years after Xi’s arrival to power-aims to turn China into a leading company in high-end manufacturing, from electric cars and commercial aircraft to semiconductors and robots.
The estimated strategic and international studies center in Report 2022 China’s spending on manufactured financing reached at least 1.73 % of its gross domestic product in 2019, which is much higher than the United States, which spent 0.39 % of GDP on industrial support in 2019.
These direct grants and tax benefits include their valuable sectors, where almost all large Chinese companies are listed some forms of government subsidies, according to Rhodium Consulting.
Despite support, China He missed many major goals From its ten -year plan, including those in space and high -end robots, and strengthened the unhealthy industrial competition that worsened global trade tensions, according to the European Chamber of Commerce in China.
Trading re -balance is unlikely
US Treasury Secretary Scott Bessin, in an interview with CNBC earlier this month, seemed optimistic about reaching the center of the center with China: “We need more manufacturing, it needs more consumption, so there is an opportunity to restore balance together, we will see if possible,” US Treasury Secretary Scott Bessin, in an interview with CNBC earlier this month.
But it is still unclear whether Bessent will make this priority during the ongoing trade negotiation with Beijing as part of the 90 -day commercial truce.
Jing Wang, an economist in China in Nomura and Jing Wang, an economist in China in Nomura, said it is unlikely that the American trade deficit with China is “greatly narrow,” said Jing Wang, China’s economist in China, said that the American trade deficit with China is unlikely to be “greatly narrow.” They expect Beijing to reduce its dependence on US imports and American manufacturers for years to transform the beach manufacturing and find appropriate alternatives.
“Since the United States is the most prosperous consumer market all over the world, a sudden flood of Chinese goods is the cheapest for the rest of the world will provoke violent reactions,” Wang added.
Dying anxiety
Continuous industrial exports in China and export are worried in non -American markets and invite new commercial barriers.
Since the specter of American definitions is waving on the horizon at the beginning of the year, Chinese game manufacturers in Yiwu, a manufacturing center, rushed to redesign Santa Claus statues with Rounder faces and blue eyes in the hope of attracting more to European consumers.
Workers make Santa Claus red caps for export at a factory on April 28, 2025 near Yiwu, Zhejiang Province, China.
Kevin Fryer Getty Images News | Gety pictures
Nick Maru, the main economist in the Economic Intelligence Unit, said that their search for new markets to compensate for missing opportunities in the United States raises concern in Europe..
Maru added: “By the end of this year, it is not only the American -Chinese tensions that we need to watch, but it will be increasing tensions in the Chinese European Union … It is no longer just electric cars (but) through a wide range of different products.”
Wang Dan, the director of China at the Eurasia Group, said that senior financial officials of the US -led G7 Nations were held last week to discuss steps to address excessive trade practices and unfair commercial practices – “with a clear goal in reducing China’s saturation in China.”
It is still possible to explain these moves in Beijing as a “deliberate provocation” and demanding them to use other ways to create a headache for foreign companies looking to the Chinese market.
“It may follow the delay in the license or exclusion from local incentive plans or the most compact supervision if tensions increase in other areas of the bilateral relationship,” said Wang from Eurasia.
China’s grip can undermine low manufacturing manufacturing in developing countries, according to Lea Fahi, a Chinese economist at Capital Economics.
For example, India’s share of global exports in furniture, games and games has increased in recent years, while exports of clothing have decreased. China expanded its provision for these goods in the same period.
Indiaand Vietnam and Indonesia Many protective measures were imposed to provide some relief for local producers from intense price competition, especially in sectors facing excessive imports and cheap imports.
However, some argue that the excessive Chinese capacity can provide a silver lining for the economies wearing inflation by reducing price pressures.
“China will export shrinkage to the rest of the world,” Maru said, noting that for markets with limited manufacturing rules, such as Australia, cheap Chinese imports can reduce the cost crisis and help reduce inflation pressure.
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No easy repairs
Economists at home and abroad called on Beijing to turn into a model led by consumption and reduce dependence on manufacturing, a strategy that has been widely blamed to deepen the pressure pressure in the economy.
In April, Chinese customs data provided a new reminder of the imbalance between China’s productive capacity and domestic demand. Trade surplus The record height was 992.2 billion dollars Last year, it is driven by continuous imbalances with the main partners, including the United States, the European Union and Southeast Asia.
The Chinese leadership went up its support, aimed at this Converting the goods associated with the United States For sale to local consumers. But convincing consumers, beware of income and job prospects, on spending again, has proven to be a difficult task.
China Retail sales The growth slowed to 5.1 % in April, the loss of economists’ expectations, with car sales significantly, as it grows only 0.7 % over the previous year, compared to a 5.5 % jump in March.
Huge waiting lines are seen in front of Yu Garden jewelry retail stores in Shanghai, China, on May 17, 2025, where the city offers consumption vouchers to stimulate consumer spending.
Norfuto Norfuto Gety pictures
Louise Le Lous, the leading economy in Oxford, said that the transformation of Beijing towards a more consumed model will witness a “slow momentum for reform.”
However, the focus of Shi on manufacturing is not completely unjustified, as Washington is likely to maintain a strong grip, restricting Beijing to more advanced technology.
“The Trump administration, by dealing with China, is the most proximity opponent, will make the annihilation larger and fence,” said Wang Numura. The “Small Varia, the High Fay” was a strategy adopted by the Biden Administration aimed at protecting a narrow set of critical techniques (small yard) with difficult and comprehensive restrictions (high fence), while maintaining natural economic exchange in other regions.
“The strategic separation is still inevitable about national security concerns,” Wang added.
Evelyn Cheng from CNBC contributed to this story.
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