Former president's trade plans might reshape China's economic future
Chinese economy faces export-dependent challenges as potential US policy changes loom ahead. Xi Jinpings economic strategy and high debt levels create uncertain path for worlds second-largest economy
In a twist of economic fate Xi Jinping finds himself in an odd spot: despite being Chinas top leader his countrys future might depend on US political decisions
The root of this situation lies in Xis self-made trap: he didnt listen to advice about making local spending more important and now exports are his only choice. Recent numbers show exports went up by 12.7% last month but experts say its not gonna last long
The world will not accept everything that China wants to export
Chinaʼs money problems are getting worse - its debt-to-GDP ratio could be near 350% (which includes hidden debt and adjusted numbers). The real-estate crisis that started with Evergrande Groups crash about 3 years ago isnt helping either
Looking at whats coming next Donald Trump becomes a key player. On Fox News channel early this year he talked about putting 60% tax on Chinese goods - maybe even higher. When he did something like this in 2018 with 25% tax Chinese companies had to pay most of it to keep selling stuff
Hereʼs what makes things harder for China:
* Factory prices keep falling for 25 months straight
* Companies like Steve Madden are moving out
* Last years trade gap with US was $279.1 billion
* Chinese makers cant cut prices more
Xi Jinping cant do much to fight back cause China needs to sell more stuff abroad but that makes other countries mad and ready to block trade. Its like a circle with no way out for Chinas leader
