Chinese President Xi Jinping has cautioned that trade wars between the United States and China will yield "no winners" as tensions between the two countries escalate ahead of a new presidential term for Donald Trump. Xi made the remarks during a meeting with heads of multilateral financial institutions in Beijing on December 10, stressing the importance of dialogue and cooperation to avoid further economic turmoil. His comments come as China battles sluggish domestic consumption, rising unemployment, and a property sector in crisis, as reported by AFP.
Xi's warning underscores China's position as it faces heightened trade pressure from Washington, particularly after Trump vowed to impose even harsher tariffs upon his return to the White House next month. The US president's first term was marked by an intense trade war, during which he accused China of unfair trade practices and intellectual property theft. With Trump set to re-enter the Oval Office in January, both countries appear poised for a renewed confrontation.
The Chinese president reiterated that "tariff wars, trade wars, and technology wars" go against economic principles and historical trends, highlighting the long-term damage such disputes inflict on both sides. While Xi expressed willingness to engage in dialogue with the US, he remained firm in China's resolve to meet its ambitious growth targets for the year, despite a difficult economic backdrop. Officially, China is targeting a growth rate of around 5% for 2024.
Official data released on the same day revealed that China's exports grew by 6.7% in November, amounting to $312.3bn. While positive, this was below economists' expectations of 8.7% growth and marks a significant slowdown from October's 12.7% surge. Nonetheless, the rise in exports has been one of the few bright spots in the Chinese economy this year, especially as domestic consumption remains weak.
Imports, on the other hand, fell by 3.9% in November, signalling a continued drop in domestic demand. This disappointing import data highlights ongoing challenges in the country’s economic recovery as consumer spending remains lacklustre. Analysts attribute the recent surge in exports to foreign buyers rushing to secure Chinese goods before potential new tariffs are imposed by the US following Trump's return to power.
As China grapples with these economic strains, policymakers are under pressure to unveil additional measures to stimulate consumption and support growth. The government has promised more vigorous support for domestic spending and has hinted at loosening monetary policy in 2025. However, the exact nature of these measures remains unclear, with many observers awaiting further guidance from the Politburo's upcoming economic policy meeting.