china navigates us trade headwinds with southeast asia surge

china navigates us trade headwinds with southeast asia surge

2025-05-09 general

Beijing, Friday, 9 May 2025.
despite a sharp 21% drop in exports to the u.s. due to tariffs, china’s overall exports surprisingly jumped 8.1% in april. this growth was fueled by a significant 20.8% surge in shipments to southeast asian nations, effectively offsetting the losses from the u.s. trade decline. the shift highlights china’s strategic pivot to diversify its trade partnerships amidst ongoing trade tensions. however, a chinese economist warns that this may be a temporary reprieve, predicting a gradual weakening of trade data in the coming months.

impact on chinese imports and domestic demand

while exports demonstrated resilience, china’s imports experienced a slight contraction, decreasing by 0.2% in april [1]. this figure contrasts with economists’ anticipations of a 5.9% decline, suggesting a degree of stability in domestic demand [1]. however, the chinese government is actively encouraging exporters to redirect their sales towards the domestic market [1]. this strategic move aims to mitigate the impact of reduced international trade and prevent the economy from sliding into deeper deflation [1].

tariffs and trade dynamics

the u.s. has imposed tariffs of 145% on all imports from china, leading to retaliatory tariffs of 125% on american imports [1]. these measures have significantly disrupted trade flows between the two economic giants [1]. raymond yeung, chief economist for greater china at anz bank, noted a dramatic decrease in the number of container vessels traveling from china to the u.s. towards the end of april, reflecting the tangible impact of these tariffs [1].

southeast asia’s growing importance

the association of southeast asian nations (asean) is emerging as a crucial trade partner for china [1]. exports to asean surged by 20.8% in april, a significant acceleration from the 11.6% growth observed in march [1]. imports from asean also saw a modest increase of 2.5% [1]. this growing trade relationship offers diversification opportunities for chinese businesses seeking to navigate the complexities of the u.s.-china trade landscape [1].

expert opinions on trade diversion

zhiwei zhang, president and chief economist at pinpoint asset management, suggests that the export surge may be partly attributed to transshipment through third countries and contracts predating the tariff announcements [1]. he anticipates a gradual weakening of trade data in the coming months, indicating that the current surge might not be sustainable [1]. this perspective highlights the importance of closely monitoring trade dynamics and adapting investment strategies accordingly [1].

new energy sector adjustments

chinese companies in the new energy sector are actively adapting to the evolving global trade environment [5]. kpmg china has highlighted the need for these companies to address challenges in european and american markets [5]. despite u.s. tariffs of 145% on chinese products like lithium batteries, chinese firms are investing in factories within the u.s. [1][5]. this includes investments from tcl zhonghuan, trina solar and longi, indicating a long-term commitment to the american market despite trade tensions [5].

the current trade landscape requires chinese smes to navigate a ‘grey area’ to survive [6]. some firms are allegedly using southeast asian countries to ‘wash’ the origin of their products to bypass us tariffs [6]. however, more southeast asian countries are rejecting these practices to protect their own economies and avoid becoming ‘secondary victims’ of us trade sanctions [6]. this highlights the increasing scrutiny and risks associated with such strategies [6].

Bronnen


China exports trade diversification