中文
By Song Xin
The international geopolitical landscape is undergoing profound changes, with security concerns increasingly taking precedence over economic priorities. This shift from a trade-first to a security-first mindset is reshaping the global trade environment, creating challenges for China's export-driven economy. Despite these pressures, China's economic resilience and adaptability remain strong, supported by its robust industrial base, innovative talent, and strategic global outreach. By understanding the deeper logic behind trade restrictions and diversifying export markets, China can maintain its position as the world's leading exporter and navigate the complexities of an evolving global order.
The shift from trade to security in geopolitics
In recent years, the global trade environment has been significantly influenced by rising geopolitical tensions. Historically, trade was prioritized as a means to foster economic growth and international cooperation. However, the current geopolitical climate is increasingly dominated by security concerns, with countries placing greater emphasis on safeguarding strategic interests. This shift has resulted in heightened trade barriers and protectionist policies, particularly between major powers such as the United States and China. For China, this evolving environment creates additional pressure on its exports, as traditional trade relationships are strained by political considerations.
The U.S., in particular, has adopted aggressive trade measures against China, including tariffs and restrictions on key industries such as electric vehicles. These actions, while aimed at curbing China's economic influence, reflect a broader trend of securitization in trade policies. For China, this means that maintaining its export dominance will require not only economic strategies but also a deeper understanding of the geopolitical dynamics shaping global trade.
The resilience of China's economy and trade
Despite the challenges posed by the shifting geopolitical landscape, China's economy and foreign trade have demonstrated remarkable resilience. This resilience is rooted in several key factors. First, China possesses the world's most mature industrial chains and manufacturing clusters, which produce one-third of global manufactured goods. This unparalleled scale and efficiency make Chinese products highly competitive and difficult to replace in global markets.
Second, over the past four decades, China has cultivated a generation of innovative entrepreneurs and skilled professionals who are deeply engaged with international markets. These individuals and enterprises have shown a strong commitment to exploring and succeeding in overseas markets, even in the face of increasing trade barriers. This combination of industrial strength and entrepreneurial spirit ensures that China's globalization efforts will remain robust and adaptable. In response to the challenges posed by U.S. tariffs, China's Premier Li Qiang, according to the 2025 government work report at this year's Two Sessions, has also planned a series of response strategies aimed at helping companies "stabilize orders and expand markets."
Moreover, China's resilience is evident in its ability to adapt to external pressures. For example, when faced with the tariffs, Chinese exporters successfully adjusted their supply chains, routing goods through Southeast Asia or Mexico for re-export to the U.S. This demonstrates the flexibility and ingenuity of Chinese businesses in navigating complex trade environments.
Understanding the real impact of U.S. tariff policies
To effectively respond to trade restrictions, it is crucial to understand the actual impact of U.S. tariff policies. Since 2018, the U.S. has imposed significant tariffs on Chinese goods, with the intention of reducing China's trade surplus and encouraging American consumers to buy domestically produced goods. However, the results have been mixed. While direct trade between China and the U.S. has declined, Chinese products have not disappeared from the American market. Instead, many goods are now shipped to intermediary countries such as Vietnam and Mexico, where they undergo minimal processing before being exported to the U.S.
This phenomenon highlights the limitations of tariffs as a tool for reshaping trade dynamics. The price differences between Chinese and American products are often too vast to be offset by tariffs alone. According to the observations of consultants and businessmen in the market, the cost of many Chinese industrial products and fast-moving consumer goods is 300 percent to 1,000 percent lower than that of American-made alternatives. As a result, even with tariffs of 10 percent or 20 percent, Chinese products remain more affordable for American consumers. This explains why tariffs have not significantly reduced the presence of Chinese goods in the U.S. market.
For China, this means that the impact of tariffs should be viewed rationally and in context. While they create additional costs and complexities, they do not fundamentally undermine the competitiveness of Chinese exports. By continuing to optimize supply chains and leveraging cost advantages, China can mitigate the effects of trade restrictions and maintain its export volumes.
Expanding and diversifying export markets
In response to rising trade protectionism, China has been diversifying its export markets. While the U.S. and EU remain significant trading partners, regions such as Southeast Asia, the Middle East, Latin America, and Africa are becoming increasingly important destinations for Chinese goods. The Regional Comprehensive Economic Partnership has further strengthened China's trade ties with the Association of Southeast Asian Nations, creating new opportunities for economic cooperation and market expansion.
At the same time, China must prepare for the challenges posed by protectionist policies in emerging markets. Just as Japanese and South Korean companies faced resistance when expanding internationally in the 1980s and 1990s, Chinese enterprises will encounter similar obstacles as they compete in global markets. These challenges underscore the importance of understanding and addressing the political and economic factors that influence trade relationships.
To achieve long-term success in globalization, Chinese companies must adopt a proactive approach to geopolitical risk management. This includes closely monitoring international developments, building strong relationships with local partners, and investing in market-specific strategies. By doing so, they can better anticipate and respond to potential crises, ensuring sustainable growth in a complex and competitive global environment.
To conclude, it is believed that by understanding the deeper logic behind trade policies, diversifying export markets, and adapting to new realities, China can maintain its position as one of the world's leading exporters and continue to thrive in an increasingly interconnected, yet fragmented, global economy.
Song Xin, the author of this article, is the founder of the Sino-European multinational think tank Sinnvoll and a former policy advisor at the European Parliament.
