For decades, the largest car factory in the world was Volkswagen’s complex in Wolfsburg, Germany. But Byd, the Chinese manufacturer of electric cars, is building two factories in China, each of them capable of producing double cars that Wolfsburg.
Recent data from the Chinese Central Bank show that state -controlled banks provided US $ 1.9 billion to industrial borrowers in the last four years. In the margins of the cities throughout China, new day and night factories are built, and existing factories are modernized with robots and automation.
China’s investments and advances in manufacturing are producing a wave of exports that threatens to cause factor and layoff closures not only in the United States, but also throughout the world.
“The Tsunami approaches everyone,” said Katherine Tai, who was a commercial representative of the United States by former president Joe Biden.
The strong tariffs announced Wednesday by President Donald Trump, which have caused the collapse of actions in Asia and other places, were the most drastic response so far to China’s export thrust. From Brazil and Indonesia to Thailand and the European Union, many countries have already mobilized more discreetly to also increase tariffs.
Chinese leaders are furious about the recent proliferation of commercial barriers and, in particular, for the last Trump tariffs. They are proud of the high savings rate, the long working days and the abundance of China software engineers and programmers, as well as their legions of electricians, welders, mechanics, construction workers and other qualified technicians.
On Saturday night, on state television, a presenter read solemnly a government statement condemning the United States: “He is using tariffs to subvert the existing international economic and commercial order” in order to “serve the hegemonic interests of the United States.”
Five years ago, before a real estate bubble broke out, the cranes that built virtually all cities in China splashed virtually. Today, many of those cranes have disappeared and those that remain rarely move. At the request of Beijing, banks have quickly displaced their loans from the real estate sector to the industry.
China uses more industrial robots than the rest of the world together, and most of them are manufactured in China by Chinese companies, although some components continue to import. After several years of rapid growth, the global facilities of new industrial equipment have already increased another 18 percent this year.
When Zeekr, a Chinese manufacturer of electric cars, opened a factory four years ago, two hours by car south of Shanghai, the facilities had 500 robots. Now it has 820, and many more are planned.
As new factories are launched, Chinese exports accelerate rapidly. They increased by 13.3 percent by 2023 and another 17.3 percent last year.
The loans of state banks are also financing a boom in business research and development. Huawei, a conglomerate that manufactures articles as varied as cell phones and car parts, has just opened in Shanghai a research center for 35 thousand engineers that has 10 times more space for offices and laboratories than the central headquarters of Google in Mountain View, California.
Leaders around the world strive to decide whether to raise commercial barriers to protect what remains from the industrial sectors of their countries.
China has quickly expanding its percentage of world manufacture. Growth has occurred mainly at the expense of the United States and other industrial powers of long tradition, but also from developing countries. China has increased its proportion to 32 percent and is increasing, from 6 percent in 2000.
The industrial production of China is greater than the combined production of the United States, Germany, Japan, South Korea and the United Kingdom.
Even before Trump won a second term, Biden government officials warned during their last year in office on excess industrial capacity in China. They raised some tariffs, particularly on electric cars.
But during their first three years, Biden government officials focused mainly on a stricter control of technologies exports such as high -end semiconductors, claiming national security concerns. They kept in force the tariffs of 7.5 percent to 25 percent that Trump had imposed on half of China’s exports to the United States in their first term.
It is still uncertain how the president’s much harder approach will develop this time. Tariffs have occasionally stopped the growth of Chinese exports, but they have not stopped it. Other nations are on a maximum alert due to the possibility that Chinese exports deviate to other places, and threaten the economies of traditional allies in the United States such as the European Union and South Korea.
Chinese car manufacturers prepared their entry into the US market in 2017, when Trump first assumed the presidency. Gac Motor, from Canton, China, took dozens of American dealers to the City Hall in November in November. The company announced its plans to sell sports utilitarian vehicles and gasoline minivans in the United States at the end of 2019.
But GAC and other Chinese car manufacturers canceled their plans after Trump included cars in their initial tariffs of 25 percent several months later.
Chinese companies still do not sell any car in the United States. It is unlikely to change: with Trump’s latest measures, Chinese car manufacturers now face US tariffs up to 181 percent.
Blocked in the United States, Chinese car manufacturers have continued to build factories and reorient their export campaigns to other places. Their sales have fired in Australia and Southeast Asia, snatching market share from Japanese and American brands. In Mexico, Chinese car manufacturers only had 0.3 percent in 2017; Last year, they exceeded 20 percent.
The rapid increase in sales in the European Union, and the evidence of the subsidies of the Chinese government, led the European Union authorities to impose tariffs of up to 45 percent on electric cars from China last October.
China not only builds car factories. For example, in the last five years he has built more petrochemical refining capacity than Europe, Japan and South Korea have achieved together since World War II. And China is in the process of building these refineries even faster this year. Petrochemical products later become plastics, polyester, vinyl and tires.
Robert Lighthizer, who was the United States commercial representative in Trump’s first term, said that the last American tariffs “are a medicine that should have been applied long ago: the true background cause are decades of Chinese industrial policy that has created an excess of impressive world capacity and imbalances.”
China exports so much because its own population buys very little. A collapse of the real estate market since 2021 has finished with much of the middle class savings and has ruined many wealthy families.
Fiscal income decreases, but military spending increases rapidly. This has caused the government to be reluctant to spend on economic stimuli to help consumers. Instead, China has compensated its real estate debacle with its export campaign, creating millions of jobs to build, equip and operate factories.
Some Chinese economists have recently joined Western economists by suggesting that the country needs to strengthen its meager Social Security Network. Earlier this year, the minimal government pension for older people was only US $ 17 per month. With that you can barely buy food, even in rural China.
The best -known economist in the country, Professor Li Dooki, from the University of Tsinghua, publicly requested in January to multiply the minimum monthly pension, at US $ 110. The Chinese government could afford it, argued, and the additional expenditure of the elderly would stimulate the entire economy.
Chinese officials rejected their advice. When the budget came to light on March 5, it included an increase in monthly pensions, but it was only US $ 3, which placed them at US $ 20 per month.
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The same budget included US $ 100 million for investments, including ports and other infrastructure that help exporters. And there was a new program to improve the technology used in manufacturing in 20 Chinese cities.