How Trump pushed China into an upward mood – Shaun Rein

Shaun Rein

Shanghai-based business analyst Shaun Rein, in an extensive interview at Forbes, says that after a very bearish 2024, China’s economy has found its way upwards because of Trump. “People rallied together and said, ‘We’ll deal with lower incomes. We’ll deal with bad sales. We want to make Trump bend’, he tells Forbes.

Forbes:

Long-time China market researcher Shaun Rein chalked up one of his three international business bestsellers in 2018 with “The War for China’s Wallet,” a look at how to sell to the country’s more than one billion consumers. At a time when investors, multinationals and politicians are awaiting a relatively brisk post-pandemic spending recovery in the world’s second-biggest economy, Rein has some good news: it’s coming soon.

“I’ve been in China for 28 years. Last year was probably the most bearish I’ve ever been on the economy,” Rein said in a Zoom interview from Shanghai earlier this month. “Youth unemployment hit 18.8%. Companies weren’t hiring. Fixed asset investment went up only about 0.1 percent. Last July and August were as bad as the height of Covid in terms of confidence and spending. Average retail sales only grew three to four percent year-on-year. People were scared,” even though personal savings totaling $20 trillion, among the world’s largest, he said.

In the last two months, however, Rein’s outlook has reversed. “This is the most bullish I’ve been on China in the last six years,” said Rein, the founder and managing director of Shanghai-headquartered China Market Research Group. Harvard-educated Rein’s other books include “The End of Cheap China” in 2012,​ “The End of Copycat China” in 2014, and last year’s “The Split: Finding Opportunities in China’s Economy in the New World Older.”

A catalyst for his new, upbeat view is that the hardest punches thrown by the Trump administration in this year’s trade war have yet to prove very damaging to China’s overall economy. “The Chinese feel that China has beat Trump with the tariff and trade war since Liberation Day, and they had the resolve to push back hard. They were not going to bend down because they wanted to push back over a century of humiliation. China bent down during the Qing Dynasty to the Western imperial powers. China wasn’t going to do that again.”

“People rallied together and said, ‘We’ll deal with lower incomes. We’ll deal with bad sales. We want to make Trump bend.’ And Trump did,” Rein said. “By going from 145% to 30% tariffs, Chinese felt they beat Trump. I don’t want say there’s exuberance in the country, but there’s a lot less anxiety than at any time I’ve seen in the last 7-8 years.”

More at Forbes.

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Trump gave in to China in the trade war, so what is next? – Shaun Rein

 

Shaun Rein

Shanghai-based business analyst Shaun Rein, author of The Split: Finding the Opportunities in China’s Economy in the New World Order, says the US’s withdrawal from its tariff war against China is causing joy among Chinese citizens. Trump faced massive resistance from American companies, which suffered a dramatic loss, he told David Lin.

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How Trump’s tariffs miss China’s resolve – Harry Broadman

 

Harry Broadman

Harry Broadman, a former assistant U.S. trade representative in the administrations of George H.W. Bush and Bill Clinton, tells Politico that China proved to be much less of a pushover than the Trump team expected it to be when they started to impose tariffs. “Whoever is advising him clearly does not understand China.”

Politico:

Former high-level trade officials experienced with Chinese negotiation tactics said Trump’s expectation that Xi — like Mexico’s President Claudia Sheinbaum and now-former Canadian Prime Minister Justin Trudeau — would drop everything and pursue tariff relief was misplaced.

“Trump thought that China was a pushover and so he behaved like a New Yorker saying ‘let’s do a deal,’” said Harry Broadman, a former assistant U.S. trade representative in the George H.W. Bush and Bill Clinton administrations. “Whoever is advising him clearly does not understand China.”…

The Chinese government is willing to roll back tariffs on specific U.S. imports deemed essential to the Chinese economy, including pharmaceuticals, Reuters reported Friday. But it’s unclear whether Beijing is ready to broker a one-on-one meeting between Xi and Trump to fast-track wider tariff reductions and lay the groundwork for a new trade deal.

“They know Trump is in an untenable position and are letting the Energizer Bunny run down his batteries while they sit on the sidelines because they think they gain nothing by addressing him,” said Broadman. “Trump’s behavior is antithetical to the way they believe leaders should behave.”

More in Politico.

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China will not give in to Trump’s demands – Shaun Rein

 

Shaun Rein

Shanghai-based business analyst Shaun Rein, author of The Split: Finding the Opportunities in China’s Economy in the New World Order, explains why China will not give in to Trump’s demands and why the idea of getting manufacturing back to the US is an illusion Americans should forget, he says at the Thinkers Forum.

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What does Trump really want from China – Harry Broadman

 

Harry Broadman

In Al Jazeera, Harry Broadman, a former US assistant trade representative and one of the chief negotiators of the WTO, wonders what Trump’s real plan is with these tariffs when it comes to China, decoupling or ending all business. “He’s obviously a deals guy in real estate, but not international markets … How he thinks is, ‘How can I win and how can I make the opponent lose?’” he said.

Al Jazeera:

While Trump has long accused China of ripping off the US on trade, analysts have questioned whether his administration has a clear goal of what it wants to achieve with its tariffs.

Harry Broadman, a former US assistant trade representative and one of the chief negotiators of the WTO, said it is not clear whether Trump wants to close the trade deficit with China or end business with the country outright.

“How does Trump deal with US firms that need their goods from China for their factories to work? It’s not black and white,” Broadman told Al Jazeera.

“Markets are layered through the different stages of production, you’ve got components coming from all over the world. The global economy is finely chopped up vertically, so it’s not obvious who the winners and losers are.”

Broadman said Trump’s approach to trade has been simplistic and unrealistic.

“He’s obviously a deals guy in real estate, but not international markets … How he thinks is, ‘How can I win and how can I make the opponent lose?’” he said.

“It’s not more sophisticated than that. He’s not interested in splitting the spoils. But you don’t get very far with that.”

More in Al Jazeera.

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How Chinese look at the tariff war, in memes and comments – Ashley Dudarenok

 

Ashley Dudarenok

China’s consumers, workers, and manufacturers look with relative confidence in their country’s position in the tariff war between the US and the rest of the world. Marketing expert Ashley Dudarenok looks at the social media, memes, comments, and other reactions of the Chinese, she tells at Time.

Time:

The AI-generated videos depicting Americans taking factory jobs, says Ashley Dudarenok, who runs a China and Hong Kong-based consumer research consultancy, relied on subverting a “long-standing stereotype about global labor dynamics.” And quickly, she tells TIME, the caricature was “absolutely everywhere, and it’s still trending.”

“There was the trade war, there was the tariff war, and now there is the meme war,” Dudarenok says.

Even among the Chinese workforce, more and more aspire to work in sectors other than manufacturing. Dudarenok says across Chinese social media she’s seen comments saying, “Chinese people don’t want to do these jobs, why would Americans want to do these jobs?” or “Chinese manufacturers are moving into Vietnam, into Africa—now we have another option: America.”

Still, the tariffs are no joke to those in China whose livelihoods depend on manufacturing goods for export. Some have also taken to social media to respond to the tariffs: by explaining how cheaply they actually manufacture goods and how much of the price consumers paid pre-tariffs came from brand markups…

Some have even appealed to Americans to buy directly from them. “They want to get rid of the middleman,” says Mei. But consumers should beware that claiming to manufacture for big brands while actually producing knock-offs is a common scam, and some scammers could be exploiting consumer panic about potential price hikes. While China produces more than half of the world’s clothing and textiles, Dudarenok says manufacturers that are “trusted partners” with big brands don’t typically sell their partners out so easily. ..

The government’s message is clear, Dudarenok says: “China is prepared to fight for its right to be in the room and to be at the table.”

More at Time.

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How China has prepared for Trump’s new tariffs – Victor Shih

 

Victor Shih

The jury is still out on whether Trump’s tariffs on imports from China will hurt the US or China more. But political analyst Victor Shih has seen how China has been anticipating the latest wave of tariffs, he tells CNN. “But China can sustain that (situation) much more so than American politicians can,” he said.

CNN:

In China, a wide swath of suppliers are likely to see their already narrow margins completely erased, with a new wave of efforts to establish factories in other countries set to begin.

The scale of the tariffs could lead to “millions of people becoming unemployed” and a “wave of bankruptcy” across China, according to Victor Shih, director of the University of California San Diego’s 21st Century China Center. Meanwhile, US exports to China could “go close to zero,” he added.

“But China can sustain that (situation) much more so than American politicians can,” he said.

That’s, in part, because China’s ruling Communist Party leaders do not face swift feedback from voters and opinions polls.

“During Covid they shut down the economy (causing) untold employment, suffering – no problem.”…

Beijing in recent weeks has also been talking to countries from Europe to Southeast Asia in a bid to expand trade cooperation – and one up the US by winning over American allies and partners exasperated by the on-again-off-again trade war.

But it’s been bracing for US trade frictions since Trump’s first trade war and his campaign against Chinese tech champion Huawei, which were a wake-up call to Beijing that its economic rise could be derailed if it wasn’t prepared.

“The Chinese government have been preparing for this day for six years – they knew this was a possibility,” said Shih in Caornia, who added that Beijing had supported countries to diversify supply chains and looked to manage some of its domestic economic challenges in preparation, among other efforts.

Today, China is much better placed to weather a broader trade conflict, experts say. Compared with 2018, it’s expanded its trade relations with the rest of the world, reducing the share of US exports from roughly one-fifth of its total to less than 15%.

More at CNN.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Get in touch or fill out our speakers’ request form.

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Beijing calling Mr. Trump’s bluff – Arthur Kroeber

 

China might have the upper hand in dealing with the US president’s efforts to curtail the country’s economy with sky-high tariffs, suggests leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, in the Christian Science Monitor. “The government believes China can sustain the pain longer than the U.S. consumer can … and the U.S. will cave first,” he says.

The Christian Science Monitor:

Today, Mr. Xi’s top priority economic strategy is to promote Chinese advanced, high-tech manufacturing, and he is pouring massive government investment into this task. In 2019 alone, China spent an estimated equivalent of 1.7% of its gross domestic product on industrial policy – four times that of the U.S., according to a CSIS study.

Such investments have led to successful Chinese innovation in key industries such as electric vehicles, and green energy transition products such as solar power equipment and lithium-ion batteries.

This dominance serves China’s goal to create a dense web of bilateral trade and investment ties that bolster its wealth and influence, while maintaining China as a fortress of industrial and technological self-sufficiency, says Arthur Kroeber, head of research at the financial services company Gavekal and author of “China’s Economy: What Everyone Needs To Know.”

“They want to have leverage over the rest of the world, which they think is best achieved through very deep economic ties,” he says. “If countries have a lot of eggs in the China basket, it’s less easy for them to rely on the U.S.”

China’s retaliation against Mr. Trump’s tariffs last Friday – imposing 34% in additional tariffs on all imports from the U.S., starting April 10 – shows that Beijing is calling Mr. Trump’s bluff, he says. After the first U.S.-China trade war launched by Mr. Trump in 2018, Beijing spent years fortifying itself against U.S. pressure and developing various retaliatory tools.

“The government believes China can sustain the pain longer than the U.S. consumer can … and the U.S. will cave first,” he says. As a result, in Beijing the plan is not to let Mr. Trump dictate the terms with his off-and-on tariffs.

“If you are China,” he asks, “do you have to play that game?”

Beijing may consider more drastic steps, such as devaluing its currency to make its exports cheaper, says Mr. Kroeber. Indeed, on Tuesday China’s central bank set its reference rate for the Chinese yuan at the lowest level since September 2023 – a move considered a warning signal to Washington.

Beijing’s propaganda apparatus is working overtime to signal resolve.

More in the Christian Science Monitor.

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Why Chinese won’t kowtow to Trump – Shaun Rein

 

Shaun Rein

After more than a week of confusion after US President Trump imposed and maintained massive tariffs on Chinese goods, one thing is sure, says Shanghai-based business analyst Shaun Rein, author of  The Split: Finding the Opportunities in China’s Economy in the New World Order. The Chinese will not kowtow to Trump, he tells Moats, and they have won round one.

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China can and will use financial stimulus to offset the Trump threat – Winston Ma

 

Winston Ma

China can and will use its financial tools to offset the negative effects of the massive tariffs US President Trump has imposed on Chinese goods, says financial expert Winston Ma, adjunct professor at the New York University in a discussion with Bloomberg. China has not been using financial stimuli during and after the Covid crisis unlike the US, and still has the resources to do so now, he says.

You can see the full clip here.

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Why containing China is not going to work – Shaun Rein

 

Tariffs and sanctions on China are not going to help the US, says Shanghai-based business analyst Shaun Rein. Only fair competition can help, certainly not when it comes to AI, he argues in The Rise of Asia.

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US companies should compete with DeepSeek and other IT firms, not get them sanctioned – Shaun Rein

 

Shaun Rein

US IT firms are wrongly pushing President Donald Trump to sanction winning Chinese companies like DeepSeek instead of trying to compete on a level playing field, says Shanghai-based business analyst Shaun Rein at the Thinkers Forum. Sanctions and tariffs are shooing the US in the foot as China develops its own industries instead of buying it in the US.

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Trump’s China tariffs will dramatically increase prices in the US – Harry Broadman

 

Harry Broadman

While the stiff inflation rate was one of the key reasons US voters preferred Trump over Harris, Trump’s announced China tariffs would increase the costs for US consumers, warns Harry Broadman, former U.S. assistant trade representative in the George H. W. Bush administration in Dow Jones.

Dow Jones:

Among the biggest uncertainty is the issue of tariffs, what products they will hit and what technology sectors could be hurt. The bottom line, though, on tariffs is that they will lead to increased goods prices.

“Trump’s plans will make us worse off economically,” said Harry Broadman, a principal at WestExec Advisors, senior economist at the Rand Corp. and former U.S. assistant trade representative in the George H. W. Bush administration. “In the short run, the consumer or individual will pay higher prices for imports and that means the cost of what they are buying has risen significantly. That means you are going to have inflation, people will find their disposable income decreased.”

During his first term in office, Trump’s administration imposed tariffs on a wide range of products from China, but the tariffs he has discussed for his next term are even higher and could be more detrimental…

During his first term in office, Trump’s administration imposed tariffs on a wide range of products from China, but the tariffs he has discussed for his next term are far higher and could be more detrimental.

“It would be one thing if Trump said, ‘I am going to work with the G7 leaders’,” Broadman said. “That is what needs to be done, but instead individual country leaders become susceptible to sweetheart deals with China.” He said if the U.S. does not work with other countries, China will retaliate. “You do it arm-and-arm with allies. Because what China will do is play off importing nations off other importing nations.”

More in Dow Jones.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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What means Trump’s victory for the China trade – Ashley Dudarenok

Ashley Dudarenok

Now the USA has elected Donald Trump as its next president, traders in China are bracing for another backlash, reports trade expert Ashley Dudarenok on its LinkedIn page. “Trump’s proposed 60% tariffs on Chinese imports + 10-20% on other global goods would set US tariff levels at their highest since the 1940s,” she writes.

Ashley Dudarenok:

It’s official. Trump wins the US election. 🙈 Before the win was official, “Trump announces win (特朗普宣布胜选)” and related hashtags had already racked up 420 million views on Douyin. Many likened the election to a gender reveal party, with one comment saying, “Congratulations USA, it’s a boy!”  Meanwhile, many are focused on real impacts, asking, “Will gold prices drop?” 👇 More below.

With Trump back in office, China’s economic policymakers are bracing for a new wave of trade policy challenges.

📊 According to China Economist, a Trump victory could require China to increase fiscal stimulus by 10-20%. This is more than what might be needed under a Harris administration.

📊 Trump’s proposed 60% tariffs on Chinese imports + 10-20% on other global goods would set US tariff levels at their highest since the 1940s.

📊 Out of 27 Chinese exporters with at least 15% of sales in the US that Reuters spoke with, 12 plan to speed up relocation if Trump returns to the White House.

📊 Four other companies, still based entirely in China, would open factories overseas if Trump raised tariffs. The remaining 11 had no specific plans but were concerned about losing US market access.

✔️ China’s approach will be crucial for its export sector and global supply chains as it navigates this new chapter in US-China trade relations.

✔️ The China’s National People’s Congress Standing Committee is meeting in early November to finalize a stimulus plan size, likely making a decision by Friday, November 8.

More at LinkedIn.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Would you like her to be at your meeting or conference? Contact us or fill out our speakers’ request form.

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