Quora: Why does China seem so confident in the Trade War?
Janus Dongye Qimeng, Interested in Chinese history and geography answered.
During the summer in 2018, I’ve travelled to quite a few places in Europe including Germany, Austria, Hungary, Serbia and Poland. For each country we visit, we spent lots of time in the local shops and supermarkets and try to find those some souvenirs that are not “made in China”. Since then I gradually developed a hobby that whenever I go for a new shop in a new country, I always read the product labels and try to sample how many of these are actually manufactured in China.
To my surprise, even in the 2018, there are still over 70% of the products that are made in China based on my observation. Nearly all the electronics, half of the clothes, most of the tourist souvenirs (all the fridge magnets), all the plastic-made products, most of the toys and even most furnitures that are made in China. You can have your own observation in your local supermarket and shops and I believe it is true for your place. Even the supermarket in a furthest village in the middle of nowhere in Serbia, you can find that most of the products are still made in China.
This is pretty astonishing to me as a Chinese national. Even there are predictions that some of the manufacturing are leaving China, however based on my observation, this is not true for all.
Is manufacturing leaving China for Vietnam, Malaysia, Taiwan and Thailand?
And more surprisingly, the poorer the country is, the more fraction of made-in-China goods are found there. I saw less Made-in-China products in Germany but more in Serbia and Hungary.
These products are actually the majority of Chinese exports. The majority of goods are still low-end products even though China is aiming for high-end manufacturing.
Do they require high tech to manufacture them? Possibly. Do they rely on the US market to make money? As far as I know, those low-end goods exports to US only account for 15% of the Chinese total exports. And China is actively expanding its market in the Africa. By making African richer, they can gradually afford more made-in-China or Chinese made-in-Africa products.
China seems to be confident because the US is over estimating its market impact. The core interests of China is focusing on the rest of worlds. There are still 200 countries that need made-in-China products.
The high-end manufacturing in China has been growing rapidly since the China 2025 initiatives. This is the sector where US is mainly targeting for. However the high-end section still accounts for a very small faction of Chinese exports. Attacking this sector does not hurt the root of Chinese exports.
If US is enforcing tariffs to all made-in-China products, China may lose 10% of its sales. At the same time, China can expand its market in Africa for another 10% to compensate its losses. Meanwhile the US may suffer higher prices for its basic goods, which indirectly hurts its people in the long run.