China Eyes Economy‑Tempering Triggers in Tight ‘Severe’ Setting
China’s Commerce Minister Announces Extensive Measures to Avert Economic Decline
Wang Wentao assured the public that China has a “broad and well‑prepared toolbox” to counter the downturn expected in the second half of the year. He also admitted that the country faces a “very severe and complex situation.”
Q2 Growth and Consumer Spending
- Official data revealed 5.2 percent growth in the second quarter.
- Retail sales increased at a far lower rate than analysts anticipated, suggesting that policies aimed at stimulating consumption have fallen short.
- Wang emphasized that global changes remain unstable and uncertain, and that new policy responses must adapt to the evolving circumstances.
Export‑Dependence and Consumption Stimulus
Wang highlighted China’s reliance on exports and indicated that the government is preparing measures to “further stimulate the momentum of our consumption development.” He underscored that while the economy is improving, the long‑term fundamentals and the consumption market’s characteristics—great potential, strong resilience, and vitality—remain unchanged.
During the briefing, Wang singled out Beijing‑based toymaker Pop Mart, whose Labubu monster dolls have become international must‑haves, gracing the handbags of celebrities such as Rihanna and Dua Lipa. He added that new forms of consumption, exemplified by Pop Mart and similar trends, are sweeping the world.
US Decoupling: “Impossible”?
China is shifting toward a growth model driven more by domestic demand than the traditional pillars of infrastructure investment, manufacturing, and exports. The transformation has become urgent since Donald Trump’s inauguration, as the former U.S. president imposed tariffs on China and other major trading partners, upending trade norms and endangering Beijing’s exports at a time it needs them more than ever to stimulate economic activity.
Wang acknowledged that despite “storms and rain,” Washington remains an important trading partner. While bilateral trade has declined proportionally for each country, overall bilateral trade has remained stable.
He argued that the firm economic and popular basis for U.S.–China cooperation “makes artificial decoupling and severing supply chains impossible.” Yet an inconsistent tone has “severely impacted and disrupted normal trade cooperation between China and the United States.” The trend of trade frictions provoked by the United States has fluctuated since Trump’s first term.
Key Takeaways
- China’s third‑quarter growth of 5.2 percent signals the need for stronger consumer stimulus.
- Export reliance is being offset by policies that aim to enhance domestic consumption.
- U.S.–China trade cooperation remains pivotal despite tariffs and trade tensions.
- New consumption trends, such as Pop Mart’s Labubu phenomenon, are reshaping global consumer markets.
