China counts on three strategic directions to survive Trump's tariff and tech war
China's growth prospects face three major long-term threats –
debt
decoupling and
demographic challenges – and many observers are curious about how Beijing will respond to these issues.
After years of trial and adjustment, policymakers have settled on three key strategic directions – a decision that has been reinforced by US President Donald Trump's
tariff war and
technology restrictions against China.
First, China will not repeat its old playbook of unleashing massive stimulus and shoring up the property market. While some economists had forecast Beijing to boost fiscal spending to put growth back on track, Chinese authorities defied expectations by maintaining moderate pro-growth policies.
For many cash-strapped local governments eager to borrow fresh funds and sell land, the central government has acted like a 'tiger parent' by strictly enforcing fiscal discipline. The message is clear: housing will not be the cornerstone of China's economic future.
US President Donald Trump's tariff policies have reinforced China's strategic directions. Photo: AFP/Getty Images/TNS
Before Trump's second term, it was a popular view that the Chinese government had acted too hastily and harshly to deflate the property market bubble by forcing banks to restrict credit to developers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
2 hours ago
- South China Morning Post
Trump admin launches review of Aukus submarine pact with Australia and UK
US President Donald Trump's administration has launched a formal review of a defence pact worth hundreds of billions of dollars that his predecessor Joe Biden made with Australia and the United Kingdom, allowing Australia to acquire conventionally armed nuclear submarines, a US defence official said. Advertisement The formal Pentagon-led review is likely to alarm Australia, which sees the submarines as critical to its own defence as tensions grow over China's expansive military build-up. It could also throw a wrench in Britain's defence planning. The Aukus security alliance is at the centre of a planned expansion of its submarine fleet. 'We are reviewing Aukus as part of ensuring that this initiative of the previous administration is aligned with the president's America First agenda,' the official said of the review, which was first reported by the Financial Times. 'Any changes to the administration's approach for Aukus will be communicated through official channels, when appropriate.' 02:52 China warns Aukus against going down 'dangerous road' over nuclear-powered submarine pact China warns Aukus against going down 'dangerous road' over nuclear-powered submarine pact Aukus, formed in 2021 to address shared worries about China's growing power, is designed to allow Australia to acquire nuclear-powered attack submarines and other advanced weapons such as hypersonic missiles.
South China Morning Post
2 hours ago
- South China Morning Post
Trump's crackdown on international students affects far more US schools than Harvard
US President Donald Trump's proclamation last week that he would bar Harvard University from enrolling new international students put the spotlight back on an unprecedented stand-off between the White House and America's pre-eminent university. Advertisement Trump's move came less than a week after a federal court injunction blocked the US Department of Homeland Security's termination of Harvard's ability to host international students. It was also just hours after the administration threatened Columbia University's accreditation standing , contending that the New York school – like Harvard, an Ivy League university whose founding predated the creation of the United States – had permitted antisemitism on campus. The hardline measures underscored Trump's determination to keep elite education in his crosshairs as part of a wider culture war that defines his political brand and raise fresh questions about whether they will be able to survive an onslaught that does not appear to have an off-ramp. With many governmental measures targeting international students – or those from mainland China and Hong Kong, in particular – on national security grounds before US courts, the price that America's most prestigious universities will pay is unclear. Advertisement Muddying the picture even more, Trump has made comments over the past week suggesting that Chinese students are welcome, topping them off with an all-caps green light for Chinese students when, on Wednesday, he trumpeted a long-awaited trade deal with China as 'done', once Chinese President Xi Jinping approves. 'WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!),' he posted on his Truth Social account.
South China Morning Post
5 hours ago
- South China Morning Post
US Treasury chief slams ‘unreliable' China at House hearing on Trump trade policy
US Treasury Secretary Scott Bessent slammed Beijing on Wednesday for its aggressive export policies, urged it to be a more dependable partner and depicted China's disjointed economic structure as hurting not only the US but the entire globe. 'China currently has the most unbalanced economy in the history of the world,' Bessent, a former hedge fund manager, told the powerful House Ways and Means Committee. 'They cannot be allowed to export their way back to prosperity, not only for working Americans but for working citizens around the world.' Noting his return hours earlier from two days of negotiating with China in London, Bessent said this week's bilateral agreement offered Beijing a chance to become a more balanced economic player. The deal could also help China boost its domestic consumption rather than extend a long-standing pattern of excessive production distorting the global economy, according to the Treasury secretary. But Bessent urged vigilance. 'China has proven an unreliable partner,' he testified before adding that 'we will see' if it is more reliable this time.
