America continues to raise tariffs, but China stands firm. Xi Jinping says, "We will not yield." Here are five reasons why China is weathering the trade war so bly.
Tariff War: Under Donald Trump's leadership, the US has rapidly increased tariff pressure on China. Recently, the US raised import duties on goods from China to 125%, while excluding most other countries from this list. In response, Beijing imposed retaliatory tariffs of up to 84%, making it clear that it will not succumb to pressure. Behind this resistance lies China's deep-seated strategy and strategic strength.
1. Xi Jinping's Strategy: "Strength at all costs"
Xi Jinping is not pursuing any kind of compromise policy. His strategy is clear—not to yield to America's aggressive policies.
State media has portrayed this conflict as a patriotic battle. Major government newspapers, such as the People's Daily, have openly stated that China has "special experience" in confronting the US and is fully prepared to support its domestic industries.
2. Long-term Preparation: Trade Diversification Strategy
China began efforts years ago to free its economy from US dependence.
Following Trump's first trade war (2018-19), Beijing shifted its industrial policies, emphasizing alternate markets and supply chain diversification. To reduce reliance on the US, Beijing invested billions of dollars in boosting domestic technology and innovation.
3. Political Control: Trump versus Jinping
- Donald Trump faces domestic opposition, Wall Street criticism, and political pressure in the US.
- In contrast, Xi Jinping in China does not face such democratic accountability.
- He maintains complete control over the media, social networks, and public discourse. This allows him to implement policies amidst economic tension without political instability.
4. Economic Tolerance: There's a cost, but also the strength to endure it
- Both countries are experiencing economic shocks, but the Chinese government has long prepared a fiscal cushion to withstand such circumstances.
- According to a CNN report, Victor Shih, director of the UCSD's China Center, says that even though some Chinese industries will suffer from tariffs, China can endure this conflict longer than the US.
5. Diplomatic Balancing: Partnerships outside the US
- Despite Trump's anti-China stance, Xi Jinping has made b diplomatic moves globally.
- He has opened new markets for China through free trade agreements and export incentives in Europe, Southeast Asia, and Africa.
- Through projects like the Belt and Road Initiative (BRI), China continues to reduce US influence.
