China’s economy is reeling from President Trump’s strategic tariffs, and Beijing is getting desperate.
In a futile effort to compensate for China’s losses by developing economic ties with new global partners, Chinese leader Xi Jinping recently met with Russian President Vladimir Putin. Both leaders touted the meeting in typically hyperbolic terms, presumably in the hope of deceiving American policymakers into believing that they had accomplished something significant.
Xi praised Putin with almost Trumpian exuberance, calling the Russian strongman “my best friend and colleague." Putin, who has encountered his own difficulties trying to stabilize the struggling Russian economy, boasted in turn that relations between the two countries had "reached an unprecedented level."
Putin and Xi negotiated numerous economic partnerships, such as agreeing to boost energy and technology cooperation in the coming years. Those agreements, however, are only papering over the cracks — China is facing monumental economic challenges, and is utterly unable to compete with the booming U.S. economy or cope with 25 percent tariffs on $250 billion worth of their exports into the vast consumer markets of America.
When Donald Trump first floated the idea of imposing tariffs on Chinese goods as retaliation for China’s long history of illegal trade practices, many so-called experts doubted that the president’s bold tactic would succeed. Skeptics in the mainstream media relentlessly warned that tariffs would only hurt the U.S. economy by stifling GDP growth and job creation, and the European Central Bank even predicted that China would emerge from the “trade war” unscathed.
The critics, as it turns out, vastly overestimated both the resilience of China’s economy and the vulnerability of America’s economy. Since President Trump first implemented the tariffs, the communist regime has been battered by economic uncertainty and faltering growth while the U.S. has enjoyed a level of prosperity not seen for a generation.
In 2018, for instance, China’s GDP grew at its slowest rate in 28 years, forcing Beijing to implement a massive stimulus to forestall economic collapse. While the stimulus appears to have succeeded in temporarily arresting the freefall, China’s authoritarian government has a habit of manipulating official economic data, and experts say there are signs that recent figures have been artificially inflated as companies “front-load” exports in anticipation of new tariffs.
The International Monetary Fund (IMF) also recently concluded that U.S. tariffs have had a “significant” impact on China, causing the IMF to lower its forecast for China’s future growth.
Unfortunately for Beijing, many of its domestic industries are beginning to crumble under the pressure of President Trump’s aggressive trade strategy, raising doubts about the country’s ability to endure a protracted stalemate in its ongoing trade negotiations with the U.S. Last month, for instance, the South China Morning Post reported that China’s dying Northeastern rust belt, once a main industrial hub, is “struggling to retain population as economic slowdown speeds up exodus.”
Tellingly, Xi refuses to acknowledge his country’s economic weakness, insisting that “China’s economy bears the supporting conditions for stable, healthy, and sustainable growth.” That heavily-qualified denial doesn’t convey much confidence, though, and the fact that Xi felt compelled to defend the strength of his country’s economy during an interview with Chinese and Russian media shortly before meeting with Putin only makes Xi’s braggadocio seem even more contrived.
In reality, China’s recent outreach to Russia is nothing but a desperate cry for help — the communist regime is incapable of keeping up with the booming U.S. economy or maintaining the sky-high GDP growth necessary to mollify its oppressed population while it struggles under American tariffs.
In the past, Russia’s relative economic impotence made it a relatively unattractive partner for Beijing — but today, the hard-pressed Chinese government simply has no other choice but to reach out for any lifeline it can find.
Nonetheless, Xi will find his next meeting with President Trump during the G20 summit in Japan later this month much more productive for his economy than his recent meeting with Putin — provided he’s ready to face reality and negotiate a new trade deal that’s finally fair for the United States.
Otherwise, Xi’s desperation will only increase as his economy continues to suffer.