Copyright © HT Digital Streams Limit all rights reserved. The Economist 5 Min Read 04 Apr 2025, 09:37 AM IST China came out badly from Trump’s Rose Garden rental. PHOTO: AP SUMMARY A great opportunity if Donald Trump unleashes a flight of rates and his administration talks about the strength of his military alliances in Asia, you might think that it is anxious times in the country that America sees as the most important adversary. In fact, our Reporting from Beijing reveals a very different picture. Maga puts pressure on China’s leaders to correct their worst economic mistakes. It also creates opportunities to draw the geopolitical map of Asia in China’s favor. China came out badly from the Rose Garden rental of Mr. Trump. If you count the new levy of 34%, plus existing duties, the total rises to 65% – and slightly higher if you include the disruptive removal of a tariff release for small packages. As exports are still about 20% of GDP, as in 2017, it will damage China’s economy. China’s tactics to bypass the manufacturing chains of its firms through countries such as Vietnam will work less well now that America is erecting barriers worldwide. The trade war is coming because China is still struggling with deflation, a housing brush and a bad demography. Over the past five years, the Communist Party has neglected poor consumption and embraced an unwise statism that the private sector has cramped. China has exported its over -capacity, skipped the world with goods and promoted a prickly chauvinism that upset America’s allies in Asia and Europe. In spite of all this, China comes the new era of Maga stronger than in the first term of Mr. Trump. President Xi Jinping has long argued that America is too polarized and too much stretched to maintain his global role. One of his slogans warns of ‘major changes in a century’. His paranoid nationalism looked like dystopian hyperbola. Now that Mr. Trump commits such defective self -harm and general destruction, it seems before his time. Mr. Xi is preparing for today’s chaotic world since he became China’s leader in 2012. He called on economic and technological self -sufficiency on his country. China has reduced its vulnerability to US choking, such as sanctions and export control. Although its banks still need access to dollars, it now makes most international payments in Yuan. China’s domestic economy has unrecognizable strengths. Competition and an embrace of technology mean that its industrial firms are ruining Western opponents in everything from electric vehicles to the ‘low-height economy’, which means drones and flying taxis. From China, the rates of Mr. Trump Detroit condemned to aging the 1970s, just as his crusade against universities will bring back innovation. One example of China’s promise is DeepSeek, which is considered a sign that the country can innovate in the American semiconductor embargo’s. The party is comfortable with home -grown AI, and it can diffuse the technology faster than the West, which increases productivity. This, and signs that Mr. Xi may have become more tolerant of entrepreneurs, helping to explain why the MSCI index of Chinese shares increased by 15% in 2025, even though US shares slipped. Four years after the bubble has burst out, property is eventually growing. In some cities, including Shanghai and Nanjing, prices have even begun to rise. The party also took steps to increase consumption. Local governments can refinance themselves with 6TRN Yuan ($ 830 billion) of new effects over three years, and another 4.4 TRT “special” effects this year. A few extra money goes to households. To understand the full economic opportunities, the party must stop prosecuting the private sector. Even China’s Leninist autocrats realize that the ‘general wealth’ entrepreneurs who started in 2021 went too far. Although some avid officials should not yet get the message, Li Qiang, the deputy of Mr. Xi, used a speech on March 23 to praise the ‘foxes’ of Hangzhou, China’s capital of innovation. The economy will also need more stimulus to increase consumption, and more determined efforts to stabilize the real estate market, which still weighs in domestic confidence. Extra consumption will also benefit Chinese relationships abroad by helping absorb surplus capacity. As America picks up walls, China will have the chance to restore trade relations around the world by offering to invest in partner countries manufacturing, rather than flooding it with exports. These economic opportunities sit with a geopolitical. America’s China policy is disturbingly unclear. Falcons in the administration insist that America, by turning away from Europe, is liberating resources to contain China. Mr. However, Trump admires Mr XI and sent an ally, Senator Steve Daines, to Beijing to evict felt for an agreement. In his first term, Mr. Trump concluded a trade agreement with China; Now he wants to go over tapping. China bets that Maga is talking about a ‘reverse Kissinger’ agreement, with America being Russia away from China, is stupid. And Trumpian protectionism, alliance and indifference to human rights are a rejection of American values: The beacon of the free world now looks fickle and dangerous. Mr. Xi does not intend to fill the vacuum that Uncle Sam left, but he has a chance to expand China’s influence, especially in the global south. If China, as well as the spread of clean technologies, are brave about reducing emissions at home, it can show leadership on climate change. Trump’s disdain for NATO and Ukraine damaged the confidence in his dedication to Asian allies and willingness to fight for Taiwan. If America makes more of its own advanced semiconductors, the incentive of defending Taiwan will decline. This is a gift for Mr. Xi. Still, dangers lie ahead of China. A trade war can cause a global recession. As Mr. Trump fails to enter into an agreement with the government in Beijing, he can pull out currencies and impose more sanctions. China can still poison relationships with the rest of the world by dumping exports on it. Whether it grabs this moment depends on one man: Mr Xi. But the fact that the event exists is a lot to another: Mr Trump. Only for subscribers: To see how we design each week’s cover, you must report to our weekly front page newsletter. © 2025, The Economist Newspaper Limited. All rights reserved. Of The Economist, published under license. The original content can be found on www.economist.com, captures all business news, market news, news events and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Donald Trump #Genitstate #China Mint Special
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