HomeAttacks on U.S.China Shock 2.0: Dumping Cheap Goods on Friends and Rivals

China Shock 2.0: Dumping Cheap Goods on Friends and Rivals

Published on

spot_img

A new challenge has emerged, echoing the disruptive impact of China’s economic strategies that shook the world more than two decades ago. Known as the “China shock,” this phenomenon initially referred to the surge of Chinese exports that significantly affected manufacturing jobs and industries worldwide. Today, we stand on the brink of what could be considered “China Shock 2.0,” a sequel characterized by China’s aggressive push to export a multitude of products at prices that undercut competitors globally. This situation has sparked a considerable backlash, not only from established economic powerhouses like the United States and the European Union but also from a wide array of emerging economies that are feeling the pressure on their domestic industries.

To revitalize its economic fortunes amid domestic challenges, China has been flooding global markets with cheap goods, from electric vehicles and renewable energy gear to steel, ceramics, and chemicals. This strategy, while potentially beneficial to consumers facing the brunt of inflation, poses a dire threat to the manufacturers and workers in countries inundated with these imports. Countries such as Brazil, India, Mexico, and Indonesia have joined the chorus of nations raising concerns about Chinese products being dumped on their markets at knockdown prices, threatening local industries and jobs.

The concern over these practices is not unfounded. Treasury Secretary Janet Yellen, during a visit to Guangzhou, China, highlighted the unsustainable nature of China’s approach, stating, “China is too large to export its way to rapid growth,” and warned of the global repercussions of such a strategy if not balanced with generating demand. This sentiment reflects a broader apprehension about the potential for a skewed global economic landscape, where an overflow of Chinese products could stifle domestic industries in countries around the globe.

The resistance against this wave of imports is multifaceted, involving antidumping investigations, tariffs, and quotas. India, for instance, has launched probes into a wide range of Chinese-made products, from bolts and screws to glass mirrors and vacuum-insulated flasks. Similarly, Argentina and the U.K. are scrutinizing imports like Chinese elevators and electric bicycles, indicative of the global scope of the challenge at hand.

This growing defiance underscores the strain on the global trading system, already tested by geopolitical tensions and efforts to decouple economic ties with China. The situation is further complicated by the fact that some of the countries raising alarms are politically aligned with China through various alliances and economic partnerships. For instance, Brazil and Indonesia have maintained robust trade relationships and political cooperation with China, making their stance against dumping a delicate dance of balancing economic interests with national industry protection.

The ripple effects of China’s export surge are tangible. For example, Chile’s top steel producer, Compañía de Acero del Pacífico, announced the closure of its Huachipato steel mill, citing the inability to compete with Chinese imports priced 40% cheaper than domestic offerings. This incident illustrates the harsh realities faced by industries contending with the flood of cheap imports.

In response to the outcry, governments worldwide have instituted over 70 import-related measures targeting China since the onset of last year. This marks a significant uptick from previous years and signals a collective move towards safeguarding domestic economies from the adverse impacts of dumping. Yet, China’s reaction has been to decry the rising tide of protectionism, viewing these measures as unjustified barriers to trade.

The collective stance against China’s dumping practices not only reflects concerns over economic sustainability but also demonstrates the callousness of China’s foreign policies. As countries assert measures to protect their industries, tensions will rise, and more countries will be suspicious of China’s trade practices.

ACZ experts have commented on the BRICS alliance and the still-forming China/Russia trade bloc. China seems more than willing to dump cheap products on its friends which could seriously hamper is efforts in completing the trade bloc and in gaining the political dominance that is seeks. This perhaps seems unwise, but China has proven to be strategically savvy. We are not sure what we are missing yet.

Latest articles

China Trying to Pull Away U.S. Allies in Asia

In a strategic move to counter U.S. influence, China recently held a rare summit...

Ex-CIA Officer Alexander Yuk Ching Ma Pleads Guilty to Spying for China

In a dramatic courtroom scene in Honolulu, Alexander Yuk Ching Ma, a former CIA...

China Imposes Its Anti-Religious Will Outside of China

China is extending its anti-religious influence across the globe, driven by the Chinese Communist...

China’s Chat ‘Xi’PT Designed for Xi’s Rendition of Socialist Propaganda

China has introduced a new player that blends cutting-edge technology with a heavy dose...

More like this

China Trying to Pull Away U.S. Allies in Asia

In a strategic move to counter U.S. influence, China recently held a rare summit...

Ex-CIA Officer Alexander Yuk Ching Ma Pleads Guilty to Spying for China

In a dramatic courtroom scene in Honolulu, Alexander Yuk Ching Ma, a former CIA...

China Imposes Its Anti-Religious Will Outside of China

China is extending its anti-religious influence across the globe, driven by the Chinese Communist...