China Trade Landscape: Exports, FDI, and the Impact of the US-China Trade War

China Trade Resilience Amidst Global Tensions

Despite escalating US-China trade tensions and efforts to diversify supply chains, China's exports and foreign direct investment (FDI) are not drastically declining. A recent report by S&P Global Ratings indicates that the role of China in global trade remains substantial. In fact, while developed countries like the US have seen a reduction in China’s share of imports, rising demand for Chinese-brand goods has kept its overall market share stable.

Global Supply Chains: A Slow Shift

• Emerging economies like India and Vietnam are becoming more competitive.
• China's share of FDI in Asia has decreased, but overall benefits for emerging markets remain limited.
• The growth of normal exports (which do not rely on imported components) strongly contrasts with processing exports that have decreased.

The Future of China Exports and Manufacturing

China's robust industrial sector, characterized by a network of specialized suppliers and comprehensive infrastructure, continues to attract global business despite risks associated with relocation.Trade and investment restrictions are also dampening confidence in the region, thereby impacting overall investment climates.

As geopolitical dynamics evolve, China’s role in global trade is set to remain significant, sparking a new focus in the upcoming political debates involving key figures like former-President Donald Trump and Vice-President Kamala Harris.