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Why China are not so worried about US tariffs, they have been preparing for years. Here is a breakdown:
The Impact: Yes, it hurts — but it’s manageable
The new tariffs will hit China’s exports and increase economic pressure in the short term. But China’s economy is massive and resilient. Its dependence on U.S. trade has been steadily declining — exports to the U.S. now make up just 14.7% of China’s total, down from 19.2% in 2018. Meanwhile, many American products still rely heavily on Chinese imports — some categories with over 50% dependence.
China’s trade with ASEAN and Belt and Road countries is growing fast, and the domestic market is a strong buffer. In fact, around 85% of Chinese exporters also sell domestically, with local sales accounting for about 75% of total revenue. The government is also working to smooth the path for companies to shift from exports to local sales, while stepping up efforts to boost domestic demand.
The Confidence: China’s economy is on solid ground
Despite years of trade pressure from the U.S. since 2017, China’s economy has kept growing. Key indicators like investment, consumption, and manufacturing have all been rising in early 2025. Tech innovation is surging too — with big strides in semiconductors, AI, and robotics.
Major risks like real estate, local government debt, and smaller financial institutions are now under control. Consumer confidence is improving, especially in first-tier cities. Global institutions like the OECD and major Wall Street firms are raising their forecasts for China’s growth and calling its economy a safe bet amid U.S. uncertainty.
The Strategy: We’ve seen this before — and we’re ready
China has been dealing with U.S. trade pressure for eight years, and it’s built up experience and contingency plans. The leadership had already anticipated this new round of tariffs and put countermeasures in place — including flexible monetary tools like interest rate and reserve requirement cuts, and fiscal levers like special government bonds and increased spending.
Expect more targeted support for affected industries, new domestic stimulus policies, and efforts to maintain market confidence. And while China hasn’t shut the door on talks with the U.S., it’s not relying on negotiations either — it’s preparing for the worst while working for the best.
The Bigger Picture: Focus inward to stay strong outward
U.S. tariffs are part of a broader global shift, and China sees this as a strategic moment to push ahead with economic restructuring and high-quality development. With less room to grow U.S. trade, expanding domestic demand is now a long-term priority. The focus: boost household income and spending, support businesses that meet local needs, and build a more unified and efficient domestic market.
Conclusion
China’s not panicking. It’s focusing on what it can control — building internal strength, staying open to the world, and continuing to develop at its own pace. As President Xi put it, “China’s economy is a vast ocean, not a small pond.” Storms may come, but the ocean’s staying power will speak for itself. |
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