China Pivots To A Familiar Playbook For Economic Recovery

With its domestic economy struggling, particularly in the real estate sector, China is increasing overseas sales of manufactured goods to bolster its economy and create jobs.

From steel and cars to consumer electronics and solar panels, Chinese factories are looking overseas buyers for goods.

China already produces a third of the world’s manufactured goods, more than the United States, Germany, Japan and South Korea combined, according to the United Nations Industrial Development Organization.

China’s exports, measured in dollars, rose 7 percent in January and February over last year. But falling prices for many Chinese products, based on a sharp increase in supply, mean that the actual quantity of exports and their global market share are rising much faster.

Other countries are increasingly concerned that China’s rise is coming at their expense.

Katherine Tai, the United States trade representative, warned month at a Brookings Institution event that the U.S.-Mexico-Canada Agreement, was up for review in the summer of 2026. She hinted that the United States might insist on tightening rules on the origin of components, notably for cars — a position also espoused last autumn by Robert E. Lighthizer, who was former President Trump's trade representative and is now the leading trade adviser to Mr. Trump’s election campaign.

China “already is a really important element of tension and concern” in North American trade relations, Ms. Tai said.

Europe and the United States also face threats from China to their longstanding economic relationships in developing countries, which increasingly choose cheaper Chinese goods. Across much of Latin America and Africa, countries now buy more from China than nearby industrial democracies, and the United States and Europe can do little about it.

“There are no rules to stop dumped and subsidized products from undercutting your exports to the rest of the world,” said Susan C. Schwab, who was United States trade representative under President George W. Bush.

The widening surplus is not only about rising exports. China has reduced or stopped buying many manufactured goods from the West as part of a series of national security and economic development measures over the past two decades.

China’s surpluses in manufactured goods are now roughly twice as big, relative to the global economy, as the biggest surpluses achieved by Japan during the 1980s or Germany right before the global financial crisis, according to calculations by Brad Setser and Michael Weilandt, economists at the Council on Foreign Relations in New York.

Deficits with Japan and Germany were long tolerated because they are American allies.

But China is an increasingly close ally of Russia, North Korea and Iran. The foreign minister, Wang Yi, mentioned all three warmly, particularly Russia, at a news conference last week.

“Maintaining and developing China-Russia relations is a strategic choice made by both sides based on the fundamental interests of the two peoples,” he said. Russia has become one of China’s fastest-growing export markets, particularly for cars, as industrial democracies’ exporters have stopped selling to Russia following its invasion of Ukraine.