China Market Intelligence

The Biden administration on May 14 announced it would maintain current tariffs on Chinese imports and raise or impose new tariffs on $18 billion worth of Chinese-origin products in “strategic sectors.” The announcement marked the conclusion of the Office of the US Trade Representative’s (USTR) four-year statutory review of the 2018 Section 301 tariffs that were modified over time and ultimately levied upon nearly $550 billion of Chinese imports during the Trump administration.

On April 16, the National Bureau of Statistics (NBS) released first quarter economic data that paints a mixed picture for China’s 2024 economic growth. While the official NBS views the data as portraying good momentum for China’s economic rebound, many independent analysts noted that seasonal demand increases in January and February around the annual Chinese New Year holiday drove up the headline demand figures, and that March data on property investment, retail sales, and overall industrial output show signs of deceleration.

In early March, China launched a campaign to encourage businesses to upgrade their industrial equipment and consumers to trade-in their outdated goods, which includes automobiles and household appliances. The campaign is intended to address several priorities at once, including boosting consumption, raising business confidence, and improving China’s manufacturing capabilities.

A newly approved bill from the House Ways and Means Committee has reignited the discussion over a popular trade provision utilized by those who sell and ship their goods to the United States, especially by companies in China. The de minimis rule allows products valued under $800 to be expedited at US ports without paying tariffs that would otherwise be applied.

The Biden administration has characterized its strategy for regulating commerce with China as a “small-yard, high-fence” approach, saying it will promote what it can and protect what it must. Under this framework, access to certain dual use technologies and services is controlled, while other, non-sensitive areas are not restricted, tariffs notwithstanding.

The US-China Commercial Issues Working Group (CIWG), the first commercial bilateral mechanism between the United States and China in seven years, recently concluded its first meeting, which took place in Washington, DC. The mechanism was created last fall, during talks between Commerce Secretary Gina Raimondo and Commerce Minister Wang Wentao, as a platform for the private sector to raise specific issues with both governments.

China has seen several high-level personnel changes at the central and provincial levels over the last few months. On February 7, Wu Qing (吴清), previously the deputy party chief of Shanghai, assumed the role of chairman of the China Securities Regulatory Commission (CSRC), succeeding Yi Huiman (易会满).

Chinese state planners have long recognized the imperative of transitioning toward a consumption-driven economy for long-term stability. But a deflationary domestic economy, low business and consumer confidence following COVID-19, geopolitical tensions, and supply chain disruptions have stifled spending.

China’s leadership is ramping up engagement with foreign business executives as the country works to increase foreign direct investment, which reached a 30-year low in 2023 amid poor sentiment from the business community driven by concerns over weak demand, overcapacity, geopolitical uncertainty, and long-standing regulatory issues.

After six months of anticipation, the Cyberspace Administration of China (CAC) finalized the Provisions on Facilitating and Regulating Cross-Border Data Flow on March 22, representing a pivotal step in the evolution of China’s data governance landscape. The provisions serve as a final rule to the draft rule released in September 2023.