{"id":288,"date":"2026-06-03T15:17:15","date_gmt":"2026-06-03T15:17:15","guid":{"rendered":"https:\/\/commercialrelocationpros.com\/?p=288"},"modified":"2026-06-03T15:17:15","modified_gmt":"2026-06-03T15:17:15","slug":"chinas-economy-is-taking-everyone-down","status":"publish","type":"post","link":"https:\/\/commercialrelocationpros.com\/?p=288","title":{"rendered":"China\u2019s Economy Is Taking Everyone Down"},"content":{"rendered":"
\n

Some economists assumed that the buying power of China\u2019s expanding middle class would ultimately fuel global growth. China has instead become a destabilizing force in the global economy. Chinese President Xi Jinping is running the country as a government-subsidized, export-driven manufacturing juggernaut. This policy is not just bad for whole industries around the world; it\u2019s also distorting China\u2019s economy and alienating trading partners.<\/p>\n

Read more The Uncertain Future of the Smithsonian\u2019s Smallest Museum<\/a><\/p>\n

Chinese manufacturers would be competitive without Xi\u2019s help. He provides massive aid anyway\u2014directly, with handouts and tax breaks, and indirectly, by suppressing the wages of factory workers and the value of China\u2019s currency to make the country\u2019s exports artificially cheap. The result is an economic model that favors producers, restrains consumers, and floods international markets with supercheap exports, including steel, solar panels, and electric vehicles. Foreign companies simply can\u2019t compete. Chinese competition is costing Germany 10,000 manufacturing jobs a month and could strip Indonesia of hundreds of thousands of garment-worker jobs. China\u2019s trade surplus ballooned to a record $1.2 trillion last year. As a share of the global economy, China\u2019s surplus in manufactured goods is the largest amassed by any country ever.<\/p>\n

President Trump used to regularly complain that China was \u201cripping off\u201d the United States and duly slapped tariffs on cheap Chinese goods. But lately Trump has seemed less concerned about the particular threat that China poses to America\u2019s economic future. In Beijing last month, Trump fawningly called Xi a \u201cfriend\u201d and agreed to work with China to create a mutually beneficial \u201cboard of trade\u201d to help manage their economic relationship. At risk are industries that are vital to American growth, jobs, and national security, including the automotive, robotics, heavy machinery, and semiconductor sectors. \u201cIt\u2019s going to be pretty catastrophic,\u201d David Autor, an economist at the Massachusetts Institute of Technology, told me. Xi\u2019s policies are spurring \u201cthe forced deindustrialization\u201d of advanced economies worldwide.<\/p>\n

China\u2019s leaders don\u2019t seem to care. Pan Gongsheng, the governor of China\u2019s central bank, recently dismissed concerns about undue state support driving an export boom as a \u201clingering misconception.\u201d Job losses in Ohio or Stuttgart are not his problem.<\/p>\n

Yet China\u2019s economic policies aren\u2019t great for China, either. Its economy has been floundering. Private investment and consumer spending remain weak, property values have been slumping, and the competition for jobs is fierce. Xi\u2019s industrial programs encourage too much investment in factories, which often lose money and require yet more state aid to survive. Taxpayer funds that could be spent on social services and welfare programs are instead propping up a glut of assembly lines.<\/p>\n

As a result, Chinese families are essentially subsidizing shoppers around the world while their own quality of life suffers. \u201cChinese policies would not be viable in a democratic country,\u201d Autor said. This system requires submission, he added, which means no one is asking, \u201cWhy aren\u2019t we consuming the fruits of all this investment? Why are we exporting everything to the world and yet we\u2019re getting poorer, or at least we feel poorer?<\/i>\u201d<\/p>\n

Xi is far less interested in the needs of Chinese people than he is in gaining an advantage in strategic industries, such as electric vehicles and humanoid robots. China hopes \u201cto lead the world in innovation and manufacturing,\u201d Craig Allen, a senior counselor at the consulting firm Cohen Group who previously served as president of the U.S.-China Business Council, told me. \u201cThe Chinese have a strategy here that has worked magnificently for the last 12 years, and they don\u2019t see any reason why that will change.\u201d<\/p>\n

In a speech in 2020, Xi called for making other countries more reliant on China so that they can\u2019t stand up to Beijing. \u201cWe must tighten international production chains\u2019 dependence on China,\u201d he declared, \u201cforming a powerful countermeasure and deterrent capability against foreigners who would artificially cut off supply.\u201d Last year Beijing suspended rare earth exports to the U.S. to press Trump to back away from ratcheting up tariffs on Chinese goods. In April China\u2019s policy makers introduced measures that give Chinese authorities more power to investigate and punish foreign companies that shift their supply chains out of the country.<\/p>\n

Read more Atlantic Trivia: Infrastructure<\/a><\/p>\n

With the global success of Chinese EVs and other products, Xi\u2019s plans may appear unstoppable. But they rest on the assumption that other countries will continue to absorb China\u2019s exports. Yet some governments are starting to protect their industries and workers. In March, the European Union introduced legislation to decrease its reliance on China by encouraging the manufacturing of green-energy products in Europe. \u201cTrade does create efficiencies, but there is supposed to be something in it for everyone,\u201d Jens Eskelund, the president of the European Union Chamber of Commerce in China, told me. \u201cWe are in a situation now where trade with China destroys value rather than creates value. Then the big question becomes: Why trade?\u201d<\/p>\n

Some lawmakers in Washington are attuned to the dangers and have begun promoting a more aggressive approach. President Biden slapped steep tariffs on Chinese EVs, computer chips, and other products in 2024 and boosted government support for crucial industries such as semiconductor manufacturing to defend U.S. industries and reinforce national security. Ro Khanna, a Democratic representative from California, advocates for more government support for essential American industries. \u201cThey can\u2019t hold us hostage,\u201d he told me.<\/p>\n

Trump\u2019s approach has been more confused. The administration has worked to curb U.S. reliance on China\u2019s supply of rare earths but has still pushed Beijing to purchase American aircraft and produce\u2014which could reduce the trade deficit and generate revenue for certain businesses but increase the U.S.\u2019s dependence on China. During his recent visit to Beijing, Trump also agreed to work with Xi to reduce tariffs on nonstrategic goods, even as the Office of the U.S. Trade Representative pursues an investigation into China\u2019s industrial overcapacity that could result in more tariffs.<\/p>\n

No country may be able to completely end its reliance on China, the world\u2019s largest manufacturer, which churns out everything including car parts and Christmas trees. That means Beijing will continue to wield immense political and economic influence. But Beijing\u2019s bloated, loss-generating, and debt-burdened industrial system can be pressured through concerted action by its trading partners. If policy makers around the world raise serious trade barriers against Chinese imports, China\u2019s many factories will need even costlier infusions of taxpayer money to survive. China\u2019s growing dependence on export demand \u201cfor normal growth should concern them, especially as geopolitical relations deteriorate across the world,\u201d Raghuram Rajan, an economist at the University of Chicago and a former governor of India\u2019s central bank, told me. \u201cI don\u2019t think that\u2019s a good place for China to be,\u201d he said.<\/p>\n

Xi could alleviate tensions with trading partners and pressures at home by reforming the economy to stimulate more domestic demand, so that Chinese households could buy more Chinese goods. But Xi has avoided these reforms, perhaps because they would compromise his grip on the country by forcing him to cede power to markets. To resolve China\u2019s structural economic problems, the Chinese Communist Party \u201cwill have to give up its political levers and control over the system,\u201d Daniel Rosen, a co-founder of the research firm Rhodium Group, told me. But the CCP \u201cdoesn\u2019t want to admit it\u2019s at the mercy of the market.\u201d<\/p>\n

In this way, the two most powerful leaders in the world, both of whom are pursuing nationalistic economic programs, could be on track to make their respective countries economically weaker. American workers and Chinese families may soon pay the price. The risk is that China inspires its trading partners to resort to a protectionism that depresses prosperity for everyone.<\/p>\n

Read more Donald Trump\u2019s Superficiality Is Bone Deep<\/a><\/p>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

American and Chinese workers are paying a high price for all the cheap goods.<\/p>\n","protected":false},"author":1,"featured_media":287,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global"],"yoast_head":"\nChina\u2019s Economy Is Taking Everyone Down - Commercial Relocation Pros<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/commercialrelocationpros.com\/?p=288\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China\u2019s Economy Is Taking Everyone Down - Commercial Relocation Pros\" \/>\n<meta property=\"og:description\" content=\"American and Chinese workers are paying a high price for all the cheap goods.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/commercialrelocationpros.com\/?p=288\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Relocation Pros\" \/>\n<meta property=\"article:published_time\" content=\"2026-06-03T15:17:15+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/commercialrelocationpros.com\\\/#\\\/schema\\\/person\\\/3a3374a445f1b5d4852b1d7c15b9fe3a\"},\"headline\":\"China\u2019s Economy Is Taking Everyone Down\",\"datePublished\":\"2026-06-03T15:17:15+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288\"},\"wordCount\":1331,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/commercialrelocationpros.com\\\/wp-content\\\/uploads\\\/2026\\\/06\\\/7572118b7c1018ec7a903dd4156b8b44.avif\",\"articleSection\":[\"Global\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288\",\"url\":\"https:\\\/\\\/commercialrelocationpros.com\\\/?p=288\",\"name\":\"China\u2019s Economy Is Taking Everyone Down - 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