Opinion | Trump tariffs could be a blessing in disguise for China’s reformers

The imminent emergence of Trump 2.0 has sparked global concerns, particularly over the possibility of an escalating trade war with China. However, Donald Trump might just provide China with the “geopolitical stimulus” it needs to rebalance its economy. In fact, his policies could be the catalyst for much-needed reforms in China as it grapples with an economic downturn.

Historically, China has shown a tendency to enact rapid changes in response to external pressures or implement difficult domestic reforms amid the complexities of the world. In 1999, then Chinese premier Zhu Rongji strategically pursued China’s entry into the World Trade Organization to leverage external forces for a transformative shift towards a market economy.

Similarly, the challenges posed by the new Trump administration’s containment strategy could compel China to implement essential reforms to revitalise its economy and navigate the evolving global economic landscape.

China faces a multitude of economic challenges, including decelerating growth, mounting debt levels and a changing relationship with the United States. While Chinese policymakers agree on the need to expand China’s internal market for sustained growth, progress has been slow.

In anticipation of escalating economic tensions with the US, China introduced the dual circulation strategy in 2020. This strategy prioritises the domestic market as the primary driver of growth while fostering synergy with external markets. Despite initial criticisms of this inward-focused approach, dual circulation aims to create a viable solution for a China seeking to build resilience against external shocks.