Shadow of 'Trump Risk' on China's Economy... Continued Concerns over Pushback [Premium Chinese Product Invasion]

Domestic Demand Slump Causes Growth Rate Forecast to Plummet to 4%

China's 'push-out' offensive in major industrial sectors is expected to continue next year. This is largely due to the growing expectation that the Chinese economy will be hampered by the 'Trump risk,' increasing the likelihood of continued domestic demand sluggishness.

According to the Beijing branch of the Korea Institute for Industrial Economics and Trade on the 29th, China's GDP growth rate next year is expected to be around 4.7%. It is forecasted that some recovery will continue due to government stimulus measures, but the intensity will weaken next year. In particular, it is anticipated that trade barriers against China will expand once the term of President-elect Donald Trump begins. The worsening external trade environment for China was cited as the biggest risk factor. Kim Jae-duk, head of the branch, said, "Sanctions against China will expand not only in advanced fields such as semiconductors and artificial intelligence but also in new areas like the Biosecurity Law, and major countries' protectionism against China regarding global supply surpluses such as steel exports will increase."

China's economic downturn is especially bad news for domestic heavy chemical industries such as steel, chemicals, and refining. This is because the volume not absorbed within China is released into the global market, causing price disruptions.

Global investment banks (IBs) also foresee further slowdown in China's economic growth, citing tariff issues. According to Hong Kong's South China Morning Post (SCMP), S&P Global lowered its forecast for China's GDP growth next year by 0.2 percentage points to 4.1% from its previous September estimate. UBS and Barclays also projected China's growth rate to be around 4% next year. The World Bank (WB) estimated that even if only half of the proposed 60% tariff increase on Chinese goods suggested by President-elect Trump is implemented, China's GDP growth rate would decrease by 0.8 to 1 percentage point.

S&P stated, "The increase in U.S. export tariffs will impact the Asia-Pacific region," adding, "Exports will clearly slow down, and investment will follow suit." It further noted, "With rising uncertainty, China's investment, employment, income, and consumption will be affected even before the U.S. tariff responses begin."

Barclays expects the new tariffs under Trump's second term to be implemented in the late second quarter or early third quarter of next year. China has been focusing early on its 'push-out' offensive ahead of the U.S. presidential election. According to the General Administration of Customs, China's export value last month surged 12.7% year-on-year to $309.0584 billion (approximately 431.5691 trillion won).

This content was produced with the assistance of AI translation services.