During the past four years, China shifted the preponderance of its exports to the Global South away from developed markets, and at the same time built production facilities across the Global South that re-export to developed markets—circumventing America’s 25% tariff on most Chinese goods and other developed-market trade barriers.
There must be some devilry behind China’s export achievement, according to the dark murmurings of Western economists: China is in deflation, so it’s selling goods on the cheap.
“Foreign officials worry about a repeat of the China shock of the early 2000s, when pro-market reforms in China and its entry into the World Trade Organization fueled an export boom that was a boon for consumers but crushed competing industries in the US and elsewhere,” warned the Wall Street Journal on May 4.