In response to the president-elect that of Donald Trump threatens to isolate Chinese products from the US market, China is reportedly seeking to engage US allies in Europe and Asia to mitigate the potential impact on its economy.
What happened: Trump's election promise to impose tariffs of up to 60% on Chinese imports poses a significant threat to Xi JinpingThe country's economic model, heavily dependent on manufacturing and exports, reported The Wall Street Journal Thursday.
To counter this, Chinese leaders are reportedly considering offering tariff cuts, visa waivers and other incentives to U.S. allies in Europe and Asia. This strategy, called “unilateral opening,” represents a shift from China’s traditional quid pro quo approach to economic and diplomatic deals.
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Despite this, China faces resistance from US allies, with the European Union (EU) expressing displeasure over China's support for Russia's actions in Ukraine. Meanwhile, U.S. allies in Asia, such as Japan, South Korea and the Philippines, are increasingly wary of China's assertive behavior.
China has already lifted visa restrictions for travelers from more than 20 countries, including Australia, New Zealand, Denmark, Finland and South Korea. Additionally, the country is considering significant tariff reductions in various industries, including electrical and telecommunications equipment, seafood and agricultural products. The moves are seen as part of China's broader strategy to boost economic growth and strengthen trade ties.
Chinese Prime Minister Li Qiang said at a trade fair in Shanghai that China will continue to seek unilateral opening to provide foreigners with the opportunity to access the Chinese market.
Why it matters: Through this new strategy, Beijing aims to capitalize on fears in Europe and Asia that Trump will revive his often hostile rhetoric against US allies. By taking the initiative, China hopes to increase pressure on the United States and attempt to divide its allies.
Trump's victory in the US presidential election also led to a decline in US-listed Chinese stocks, with analysts warning of a potential escalation in US-China tensions and its impact on trade policies . Top Chinese Stocks Listed in the United StatesAlibaba Holding Group BABA,JD.com, Inc.(NASDAQ: J.D.),Baidu, Inc. BEGINNING, NIO Inc. NIO,Li Auto Inc. LI,and XPeng Inc. (NYSE: XPEV) were trading lower in the United States after Trump's victory.
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