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China's Economic Strategy Amid US Tariff Uncertainty: Diversification and Domestic Demand
US Tariff Uncertainty and China's Response Strategy
The National People's Congress (NPC) in China largely focuses on domestic priorities, but external pressures, including tariffs, are never far from discussion. The uncertainty arising from Washington's tariff regime impacts both Chinese businesses and global corporations operating in China. Chinese Premier Li Qiang noted that global economic momentum remains sluggish, with multilateralism and free trade under severe threat. Chinese Minister of Commerce Wang Wentao further emphasized that the external environment is worsening with greater instability.
Export Diversification and Boosting Domestic Demand
To counter tariff uncertainty, China has diversified its export destinations. While China's exports to the US dropped by nearly 20% in 2025, overall exports increased by 6.1%, yielding a record surplus of $1.2 trillion. Southeast Asia is now China's largest trading partner. China is also shifting its economy away from exports and boosting domestic consumption, particularly in services. Minister Wang Wentao highlighted significant potential in areas such as transportation, housekeeping, online audio-visual services, residential tourism, the automotive aftermarket, and inbound tourism.
Technological Innovation and Industrial Upgrading
China is making a huge push to enhance global competitiveness through tech innovation and industrial upgrades. Erik Buschmann, Senior Vice President at Airbus, underscored the global nature of the aviation industry and stated that being local in China helps avoid tariff impacts. Ruan Hongxian, Chairman of Yixintang Pharmaceutical Group, indicated that China will achieve technological breakthroughs to enhance traditional medicine by upgrading resources and technology in this field. These efforts demonstrate China's strategy to build self-reliance, encourage domestic consumption, and strengthen economic ties with countries large and small amidst global uncertainty.
*Source: YouTube: CGTN (2026-03-14)*
