Chinese exports reached a record in 2024, they increased by 7.1% compared to 2023. And if for the Chinese economy, this is good news, behind this trend lies in fact a great danger for the second largest economy in the world. Decryption.
It is one of the rare green indicators of the Chine in 2024: its record exports, worth $3.6 trillion. Concretely, they represent around a fifth of its growth. This therefore means that the share of exports in the Chinese economy is important, if not essential. If we look in detail, it is in particular the company BYD which is boosting exports, the Chinese manufacturer of electric cars is at the forefront of this trend, with sales abroad which have simply exploded. last year. Just one figure to illustrate it: +72%!
China is vulnerable
But this importance of exports in the Chinese economy is a problem. This means that the Chine is extremely dependent on exports, precisely. And who says dependence, says vulnerability. The main risk obviously is the threat of Donald Trump to increase tariffs by 60% on all imports of Chinese products when he arrives at the White House. This policy could deal a severe blow to this pillar of Chinese growth which will have to find an answer to this question: what to do with Chinese production which can no longer be delivered to the United States? Because that's where it gets stuck. Because the risk of a trade war with the United States could have consequences for relations between Beijing and other nations. If Chinese companies try to flood other countries, they too may have to take measures to limit the phenomenon. L'European Union notably has already implemented customs duties of up to 45% on electric vehicles manufactured in China.
Also readChina prepares for Donald Trump's economic policies
Internal crisis
But there is a catch: all this Chinese production cannot be distributed in China. This is the whole problem of its economy. Demand is weak, the country is particularly hit by a persistent crisis in the real estate sector. So to restart the consumptionthe authorities subsidized the country's large industries. They also eased restrictions on the purchase of housing. Measures to encourage the population to buy, as well as the creation of discounts for the exchange of old household appliances against the purchase of more recent models, obviously Chinese.
In any case, all this had one consequence: the fall in prices. As a result, many Chinese companies have seen their margins reduced or even completely disappeared. Accounts in the red which have pushed many companies to close their doors. The situation worries the authorities. They will also have to present new budgetary support measures at the meeting of the National People's Assembly in March 2025. And then this other meeting, not insignificant in the coming days: the publication of growth figures. Because if Beijing were counting on growth of 5% for 2024, it could be below projections, between 4 and 4.5%!
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