Stabilizing foreign trade and growing domestic demand against tariffs

Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinion and not necessarily the views of CGTN.

Data from the China Council for the Promotion of International Trade (CCPIT) shows that the global economic and trade friction index in February 2025 stood at 106, remaining at a high level of trade tensions. This figure reflects the fact that the global economic and trade environment remains severe. Looking at the country-specific indices, among the 20 countries and regions within the monitoring scope, the U.S., the EU and South Africa took the top three places.

The U.S. has long implemented an "America First" trade policy and has continuously issued unilaterally restrictive measures such as punitive tariffs and sweeping sanctions, ripping up the rule book on global trade and economic activities. According to the press briefing held by CCPIT on April 28, not only does the amount of money involved in punitive measures implemented by the U.S. rank first for eight consecutive months, but also the number of the measures issued, for two consecutive months.

Moreover, the U.S. also "outperforms" other countries in the China-related index. As of April 2025, the U.S. has wildly imposed additional tariffs on goods from China, jeopardizing their bilateral trade ties. Frequent economic and trade frictions have subjected businesses to rising tariff costs and restricted market access, leading to a decrease in export orders and a steep rise in production pressures.

Against the headwinds of tariffs, CCPIT has introduced a swathe of policies and measures to stabilize foreign trade, launching a "combination punch" of policies. For example, it strongly supports enterprises in exploring overseas markets. Specific measures entail organizing enterprises to participate in various international exhibitions for access to more orders, optimizing the business environment and providing assistance for companies in responding to economic and trade frictions.

Facing the headwinds of tariffs, enterprises are actively diversifying their market layouts and portfolios to negate market uncertainty. Many foreign trade enterprises no longer overly rely on a single market, but turn their attention to various regions around the world.

Some enterprises that traditionally focused on the European and American markets have invested more resources in exploring emerging markets such as countries participating in the Belt and Road Initiative, the Association of Southeast Asian Nations and those in Africa. Through participating in local exhibitions, establishing marketing networks and cooperating with local enterprises, they are gradually embracing emerging markets and thereby in a better position to fend off trade frictions coming from the European and American markets.

Platform enterprises represented by Pinduoduo and cross-border e-commerce enterprises have played an important role in assisting foreign trade enterprises. Platform enterprises leverage their big data capacities to accurately match the domestic and international market demands for foreign trade enterprises and help them expand sales channels.

Cross-border e-commerce enterprises, on the other hand, reduce the transaction costs of enterprises and shorten the trade chain by building user-friendly online trading platforms. For example, some cross-border e-commerce platforms have launched services such as "drop shipping" and "overseas warehouses," relieving the inventory pressure of foreign trade enterprises and improving the efficiency of goods distribution.

At the same time, these platforms also assist foreign trade enterprises in expanding their domestic markets, guiding them to promote high-quality products to domestic consumers, achieve the coordinated development of domestic and foreign trade, and thereby reduce the burden on foreign trade enterprises.

While stabilizing foreign trade, the Chinese government has also rolled out policies to expand domestic demand and consumption, injecting strong impetus into economic growth. From a policy perspective, the strategic position of consumption in the top-level design has continued to be strengthened in recent years.

In March this year, the General Office of the Central Committee of the Communist Party of China (CPC) and the State Council issued a special action plan for boosting consumption, comprehensively deploying measures to boost consumption.

On the demand side, it improves residents' income expectations and enhances their consumption confidence through increasing income and reducing burdens through methods such as improving the income distribution mechanism to enhance residents' consumption ability and willingness.

On the supply side, it proposes a number of measures in terms of service consumption, bulk consumption, brand leadership and new forms of consumption, deepens the supply-side structural reform, expands the supply of medium and high-end goods and services and cultivates new consumption growth points.

According to the National Bureau of Statistics, the growth rate of total retail sales of social consumer goods in the first quarter was 4.6 percent, rebounding by 1.1 percentage points compared with the whole of last year and rising month by month, showing that various policies to boost consumption have delivered positive results.

Service consumption, digital consumption and green consumption have become new growth poles. The proportion of service consumption continues to increase, while that of digital consumption in total retail sales of social consumer goods is stabilizing, and the penetration rate of green consumption such as new energy vehicles has reached a new high.

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