‘The Tsunami Is Coming’: China’s Global Exports Are Just Getting Started

For decades, the largest car factory in the world was the complex of Volkswagen in Wolfsburg, Germany. But Byd, the Chinese electric car manufacturer is building two factories in China, each capable of producing double the Wolfsburg cars.

Recent data from the Chinese Central Bank show that banks controlled by the state have given $ 1.9 trillions of dollars to industrial mutuals in the last four years. On the margins of the cities of all over China, the new factories are built day and night and the existing factories are updated with robots and automation.

China’s investments and progress in production are producing a wave of exports that threaten to cause factory closures and layoffs not only in the United States but also all over the world.

“The tsunami is coming for everyone,” said Katherine Tai, who was the commercial representative of the United States for the former president Joseph R. Biden Jr.

The strong rates of President Trump were announced on Wednesday, which caused stock In Asia and elsewhere to dive, they were the most drastic response to the thrust of China’s export. From Brazil and Indonesia to Thailand and the European Union, many countries have already moved in silence also to increase rates.

Chinese leaders are furious for the recent proliferation of commercial barriers and in particular the latest Trump rates. They are proud of the high saving rate in China, long hours of work and abundance of engineers and software programmers, as well as its legions of electricians, welders, mechanics, construction workers and other qualified traders.

On Saturday evening on the state television, an anchor solemnly read a declaration of the government that condemns the United States: “He is using the rates to subvert the current international economic and commercial order” in order to “serve the hegemonic interests of the United States”.

Five years ago, before a housing bubble broke out, the cranes that put the towers of apartments punctually punctually every city in China. Today, many of those cranes have disappeared and those that are rarely left move. At the behest of Beijing, the banks quickly moved their loans from the real estate sector to the industry.

China is using more factory robots than the rest of the combined world and most of them are made in China by Chinese companies, although some components are still imported. After several years of rapid growth, the overall installations of new factory equipment have already increased by another 18 % this year.

When Zekr, a Chinese electric car manufacturer, opened a factory Four years ago in Ningbo, two hours of cars south of Shanghai, the structure had 500 robots. Now it has 820 and many others are planned.

As the new factories come online, Chinese exports are quickly accelerating. They increased by 13.3 percent in 2023 and then another 17.3 percent last year.

State banks loans are also financing a boom in the research and development of companies. Huawei, a conglomerate that produces various objects such as smartphones and car parts, has just opened a search center for 35,000 engineers who have 10 times more space for offices and workshops of the Google headquarters in Mountain View, in California.

Leaders around the world are struggling to decide whether to increase commercial barriers to protect what remains of the industrial sectors of their countries.

China quickly expanded its global production share for decades. Growth has mainly arrived at the expense of the United States and other long -date industrial powers, but also of developing countries. China has increased its share to 32 percent and increasing, from 6 percent in 2000.

The Chinese factory production is larger than the combined production of the United States, Germany, Japan, South Korea and Great Britain.

Even before Mr. Trump had won a second term, the Biden administration officials warned during the last year in office on the excessive industrial capacity in China. They raised some rates, especially on electric cars.

But during their first three years, Biden administration officials focused mainly on closest export controls for technologies such as high -end semiconductors, citing national security problems. They left the rates of 7.5 by 25 percent that Mr. Trump had imposed in half of Chinese exports to the United States in his first term.

He is not sure of how the president’s much harder approach this time will take place. The rates occasionally slowed down China’s growth in exports, but they didn’t stop it. Other nations are on alert for the possibility that Chinese exports can be diverted elsewhere, threatening the economies of long -standing US allies such as the European Union and South Korea.

The Chinese car manufacturers were preparing a push on the American automotive market in 2017, when Trump entered for the first time. GAC Motor in Guangzhou, China, brought dozens of American car retailers to City car show that November. The company has announced its intention to sell petrol sports vehicles and minivans in the United States by the end of 2019.

But GAC and other Chinese car manufacturers canceled their plans after Mr. Trump included cars in his initial rates of 25 % several months later.

Chinese companies almost do not sell almost cars in the United States. It is unlikely that you change: with the latest moves of Mr. Trump, Chinese car manufacturers now face US rates until 181 percent.

Blocked in the United States, Chinese car manufacturers continued to build factories and rotated their export campaigns elsewhere. Their sales have increased in Australia and in the South -East Asia, taking market shares from Japanese and American brands. In Mexico, Chinese car manufacturers held only 0.3 percent in 2017; Last year it was over 20 percent.

Quick sales gains in the European Union and evidence of Chinese government subsidies, pushed EU officials last October impose rates up to 45 percent on electric cars from China.

China is not just building car factories. He has built more petrochemical refinery skills in the last five years, for example compared to Europe, Japan and South Korea that have created together from the Second World War. And China is on the right way to build these refineries even faster this year. Petrochemicals are then transformed into plastic, polyester, vinyl and tires.

Robert E. Lighthizer, who was the commercial representative of the United States in the first mandate of Mr. Trump, said that the latest American rates “have long been late medicines – the real main cause is decades of Chinese industrial policy that has created excessive breathtaking capacity and global imbalances”.

China is exporting so much partly because its own people are buying so little. A collapse of the real estate market since 2021 has wiped out most of the savings of the middle class and has ruined many wealthy families.

Tax revenues are decreasingBut military spending is increasing quickly. This left the wary government of the expenditure for the economic stimulus to help consumers. China instead compensated for its housing debacle with its export campaign, creating millions of jobs to build, dress and manage factories.

Some Chinese economists have recently joined western economists in suggesting that the country must strengthen its thin social security network. At the beginning of this year, the minimum pension of the government for the elderly was only $ 17 per month. This barely barely buy the expense, even in rural China.

The best -known economist in the country, Professor Li Dookui of the University of Tsinghua, publicly called in January for collecting the minimum monthly pension several times, at $ 110. The Chinese government could afford it, supported it, and the extra expenditure of the elderly would stimulate the entire economy.

Chinese officials rejected his advice. When the budget was released on March 5, it had an increase in monthly pensions, but it was only $ 3, bringing it to $ 20 per month.

The same budget included $ 100 billion for investments, including ports and other infrastructures that help exporters. And there was a new program to update the technology used in production in 20 Chinese cities.