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NBC News
16 hours ago
- Business
- NBC News
Young Chinese consumers are spending to feel good amid slower economic growth
HONG KONG — Young people in China may not be buying cars or houses, but there's always money for milk tea and toys. It's a challenging time to be a young person in China: The world's second-biggest economy is growing far slower than it was when their parents were their age, with the U.S.-China trade war threatening to further weigh on growth. Competition for jobs is cutthroat and monthly youth unemployment stands at about 15% on average, with Chinese universities churning out a record 12.22 million new graduates this year. Feeling 'besieged' in life in the face of these economic obstacles, young Chinese consumers at home and abroad are finding comfort in smaller purchases. 'I spend to make myself happy,' said Kitty Lu, a 23-year-old Chinese student in Melbourne, Australia. 'It sounds a bit reckless, but I do have a number in my mind.' Lu said most of her spending goes toward supporting celebrities she likes. Occasionally, she allows herself a 'small indulgence' in the form of 'blind box' toys such as Disney dolls or the Labubu monster figurines that have become a global frenzy. 'To be honest, I'm not that into these dolls,' she said, adding that the purchase is more about having fun with friends as they open the blind box together to see which doll is inside. Lu's spending habits reflect a growing trend in recent years among young Chinese who show 'low interest' in big purchases such as houses and cars but are embracing food and cultural products that offer 'instant emotional gratification,' according to the Fudan Development Institute, a Shanghai-based think tank. This phenomenon, also known as 'emotional consumption,' has resulted in average annual growth of about 12% in industries including films and games since 2013, according to a report in March by the Chinese software and internet services company Kingsoft. The overall market for emotional consumption is projected to exceed $270 billion this year, the report said. Sweet drinks, low prices, happier life One of the biggest beneficiaries of Chinese consumer trends has been the country's beverage sector, which according to S&P Global is expected to grow up to 6% this year. Mixue, a bubble tea chain known for its cheap drinks, now has more stores worldwide — over 45,000, with nearly 10% of them outside mainland China — than any other food and beverage chain, including McDonald's, which has a global store count of 43,000, and Starbucks, with 38,000. In March, Mixue's shares jumped more than 40% on its market debut in Hong Kong. The brand's success stems largely from its low prices and rapid expansion, especially in less developed cities, as Chinese people adjust their spending habits while grappling with job security and other economic concerns. Kelsey Yu, 23, a graduate student in Beijing, said she bought a bottle of lemonade from Mixue for the equivalent of less than $1 on a visit in April to the southern Chinese city of Jieyang. 'The drink quenched my thirst. It had a large portion and was cheap,' she said, adding that Mixue's items are 'better value for money' than those of many local competitors. Yu said that as a foodie, she drinks tea-based beverages at least once or twice a week and may 'indulge a bit more' while traveling. 'I usually order milk tea when I'm feeling tired or if I just want to have a good time,' she said. 'But I have self-control. So I won't have it every day.' A complicated picture of Chinese consumption While U.S. officials often say Chinese consumers are not spending enough, the situation is not as clear-cut as it is portrayed, analysts said. In the past quarter-century, China's consumer spending has grown an average of 8% or more each year, one of the highest rates among major economies. But it has been outstripped by investment, making consumption a smaller part of China's overall GDP. Speaking at the World Economic Forum's 'Summer Davos' event in Tianjin on Wednesday, Chinese Premier Li Qiang said China sought to become a 'mega-sized consumption powerhouse.' Boosted by government subsidies, China's retail sales grew 6.4% in May, the fastest rate since late 2023. Sales during this year's monthlong 618 online shopping festival, which ended June 18, were a record 855.6 billion yuan ($119 billion), according to retail data provider Syntun, 15.2% higher than last year. Young Chinese in particular are 'living frugally to spend big,' according to state-backed research. Though they are budget-conscious when it comes to daily necessities, they 'don't hesitate to splurge' for their hobbies and happiness, it said. 'I'd rather spend 300 yuan ($42) on a great meal, and if the food is really good, I would think it's totally worth it,' Yu said. 'But if it's a 300-yuan piece of clothing, I might hesitate.' Amid China's economic challenges, middle-class consumers are less brand-conscious and prefer cheaper alternatives, said Yaling Jiang, founder of ApertureChina, a consulting firm that specializes in consumer research. 'Now saving is seen as cool, and seeking value is seen as cool,' Jiang said. 'I think the downturn definitely changed the culture of spending.' Chinese mallgoers these days spend money almost exclusively on the first and second floors, where food and beverage shops are concentrated, Jiang said. 'People are walking around the mall with a cup of milk tea or coffee,' she added, looking at what's available in stores before going home to buy cheaper alternatives online. China's luxury market, which had accounted for almost a third of global sales, declined 18% to 20% last year, according to a January report by Bain and Company. 'I think there is less focus on the social status comparison, and more focus on what brings them personal happiness,' said Lynn Song, chief economist for greater China at ING, a post-pandemic change that has also been seen elsewhere. Consumers in China are both trading up and spending down, depending on the sector, said Shan Guo, a partner at Hutong Research, an investment advisory group based in Hong Kong. 'They are not buying luxury bags, but they are buying Pop Mart,' Guo said, referring to the Chinese retailer behind the Labubu toys. 'Labubu can be quite expensive.' Despite concerns about slower economic growth in China and elsewhere, Lu, the Melbourne student, said her friends are still 'quite willing to spend for fun.' 'They're not big spenders,' she said. 'They're just happy to treat themselves when having a good time.'
CNN
27-02-2025
- Business
- CNN
China sees opportunity in a world turned upside down by Trump
President Donald Trump's upending of US foreign policy has alarmed allies and nations in need. His administration has frozen foreign aid, threatened to take control of other countries' sovereign territory, exited key international bodies and alienated Europe with an embrace of Russia. But the head-spinning set of moves, that together signal a retreat from leadership of a liberal order to 'America First,' is playing right into the messaging of the US' biggest rival. In this time of 'transformation and turbulence,' China has a vision for a 'safer world,' its top diplomat Wang Yi told G20 counterparts last week as he reiterated Beijing's pitch for 'a new path to security' without alliances, 'zero-sum' competition and 'bloc confrontation.' That vision – coded language for reshaping a world order China sees as unfairly dominated by the West – has been a cornerstone of Chinese leader Xi Jinping's push to step up as an alternative global leader to the US. And the drive has the potential to take on new relevance, observers say, as Beijing eyes the opportunities to advance its influence in the wake of Trump's US foreign policy upset. Trump's shake-up was obvious even in the room of foreign ministers from the world's largest economies where Wang, China's most seasoned diplomat, spoke in South Africa last week. The absence of US Secretary of State Marco Rubio meant no high-ranking US diplomat was there to present an American counterpoint to a gathering of countries that make up 80% of the global population and three-quarters of international trade. On the surface, this shift has the potential to accelerate China's ascent as a global power, potentially granting the world's second-largest economy space to win more allies, boost its global leadership and shift global norms and rules – such as those on human rights or security – in its favor. But countries from Europe to Asia are well aware of the wide gap between Beijing's benign rhetoric and its behavior as it flouts a major international ruling to harass Philippine vessels in the South China Sea or intimidates Taiwan – the self-ruling democracy Bejing claims. Meanwhile, the Trump administration has signaled it wants to shift attention from other global conflicts to focus on its rivalry with China. And Beijing will face that and potential fresh US tariffs on its goods as it tries to revive a weak economy – limiting how much it can pour into expanding global influence. But even still, there are signs that China may see potential for those headwinds to just be some turbulence in a rise made easier by Trump's policies. 'Trump 2.0 era will undoubtedly weaken the US' leadership in international affairs,' an analysis published this month on the website of Shanghai-based think tank Fudan Development Institute said. 'As other countries, particularly the European Union and China, actively respond, the power vacuum left by the US withdrawal may be filled by them … With the US no longer able to dominate global issues as it once did, a new global governance structure may emerge,' it said. As Trump dismantles the US foreign aid sector – freezing funding to global education, health and development programs – some English-language arms of Chinese state media released scathing critiques of such assistance. Foreign aid is 'viewed by the US as a tool to maintain its hegemonic position and engage in geopolitical maneuvering,' nationalist tabloid the Global Times said in an article on USAID, an agency Beijing has long seen as a thorn in its side, accusing of sparking democratic 'color revolutions' and indoctrinating US proxies across the world. USAID, which was founded during the Cold War, has long played a key role in advancing American soft power and democratic ideals. Beijing, however, wasn't looking at Washington's aid freeze as an opportunity because – unlike the US – China treats 'other nations with sincerity, fairness, and selflessness,' an editorial by the state-run outlet claimed. There has been some indication China will take targeted steps to ramp up its support in regions it sees as strategically important in the wake of the US freeze – a move that would align with what experts have seen as a soft-power struggle between the two countries in recent decades. In Cambodia, for example, Beijing released $4.4 million for demining operations, as US-backed landmine removal programs were halted in eight provinces, the Associated Press reported, citing the Cambodian Mine Action Center. Overall, however, experts say there's little chance that Beijing would be able or willing to step up to fill the US aid void. China is a huge player in global development, funneling more than a trillion dollars into overseas projects between 2000 and 2021. But unlike the US, data show the vast majority of Beijing's development spending is not direct aid, but loans and other financing. And economic belt-tightening has seen Beijing move away from big-ticket commitments, like building railroads and power plants under Xi's signature Belt and Road overseas infrastructure drive, paring back to more modest projects in recent years. 'Trump is giving China some opportunity – but China might not be able to pick up this US gift,' said Shanghai-based foreign affairs analyst Shen Dingli. 'Due to our gloomy economy and the (downsized) version of Belt and Road … we have less money to buy loyalty.' Even still, China may look to capitalize on countries' uncertainty about the US to expand its trade and security ties, as well as access to critical minerals, observers say. And countries may take uncertainty in US relations – from the aid freeze to Trump's tariff threats – into calculations for dealing with the world's two largest economies. 'Beijing can send the message to the rest of the world … that the US is fundamentally going to be unreliable,' said Manoj Kewalramani, who heads Indo-Pacific studies at the Takshashila Institution research center in the Indian city of Bengaluru. 'Why would you want to pick a fight with Beijing now?' There are already signs of concern from some parts about Beijing's potential gains from a Trump-era pullback of US assistance. In an open letter to Trump posted on social platform X, Nepalese lawmaker Rajendra Bajgain last week warned that a 'vacuum created by reduced American involvement will inevitably be filled by other powers that do not share the values of democracy and free enterprise.' Two major US-funded infrastructure projects as well as other initiatives in Nepal have been put on hold following the US aid freeze, Reuters reported. In a response to a request for comment from CNN, China's Ministry of Foreign Affairs said that the US 'adjustments' were America's internal affairs, and that Beijing has 'consistently' provided assistance 'to the best of its ability.' China's aid 'aligns with the needs of recipient countries for socio-economic development and the improvement of people's livelihoods,' it said. But even as some of Trump's moves so far have created potential openings for Beijing, there's also the hanging question of how his administration may ultimately calibrate its aid and foreign policy – and its rivalry with China. When asked this month if the foreign aid shake-up was giving China and Russia an opportunity to expand their influence, national security adviser Mike Waltz told NBC's 'Meet the Press' that 'all too often these missions and these programs, number one, are not in line with strategic US interests like pushing back on China.' And speaking to European counterparts earlier this month, US defense chief Pete Hegseth warned that the US could no longer be 'primarily focused on the security of Europe.' Instead, the US is 'prioritizing deterring war with China in the Pacific,' he said. There have also been signs of Trump's brash diplomacy working against Beijing's benefit. Panama, the first country in Latin America to sign onto China's Belt and Road Initiative, announced it would pull out of the scheme after Trump repeatedly threatened to 'take back' the Panama Canal, falsely claiming Panama had ceded its operations to China. And in Europe, even as Trump officials lambasted European and NATO counterparts earlier this month and warmed to Russia, US allies there appeared galvanized, rather than dissuaded, to bolster NATO with more spending. That pivot will also mean Beijing is watching closely whether Washington is able to peel away its close ally Moscow, as the White House has signaled it may hope to do. Even still, Beijing will likely see the time as right to put more focus on repairing strained relations with Europe – a potential opening that could widen if Trump slaps tariffs on European goods. Trump has also so far not shaken US alliances in Asia, as Beijing may have hoped. And it's not clear that 'America First' will leave a security void in Asia or weaken the US alliance system there. The US president held seemingly successful meetings with Japanese Prime Minister Shigeru Ishiba and Indian counterpart Narendra Modi this month, and signaled support for the Pacific-focused AUKUS alliance of Canberra, London and Washington. And uncertainty or future demands from Trump could also strengthen arsenals and partnerships in the region. On Monday, US allies the Philippines and Japan agreed to further deepen their defense collaborations. Beijing, so far, has been seen as continuing to probe the limits of its own military muscle-flexing in the region, in recent days conducting what New Zealand said were unprecedented live-fire drills in the Tasman Sea. On Wednesday, Taiwan accused China of setting up a zone for 'live-fire training' without advance notice a day after the island's coast guard detained a Chinese-crewed cargo ship suspected of cutting an undersea cable in the Taiwan Strait. But Beijing will be carefully watching how Trump's policies and his allies' response to them weigh on its core ambitions to defend its territorial claims in the South China Sea – and take control of the self-ruling democracy of Taiwan. 'As long as the war in Europe would be put to an end, China's freedom of action in our part of the world might be more seriously checked and balanced,' said Shen in Shanghai. 'China must be watching, calculating how it should adjust its new approach to this fast-moving situation,' he said.
CNN
26-02-2025
- Business
- CNN
China sees opportunity in a world turned upside down by Trump
President Donald Trump's upending of US foreign policy has alarmed allies and nations in need. His administration has frozen foreign aid, threatened to take control of other countries' sovereign territory, exited key international bodies and alienated Europe with an embrace of Russia. But the head-spinning set of moves, that together signal a retreat from leadership of a liberal order to 'America First,' is playing right into the messaging of the US' biggest rival. In this time of 'transformation and turbulence,' China has a vision for a 'safer world,' its top diplomat Wang Yi told G20 counterparts last week as he reiterated Beijing's pitch for 'a new path to security' without alliances, 'zero-sum' competition and 'bloc confrontation.' That vision – coded language for reshaping a world order China sees as unfairly dominated by the West – has been a cornerstone of Chinese leader Xi Jinping's push to step up as an alternative global leader to the US. And the drive has the potential to take on new relevance, observers say, as Beijing eyes the opportunities to advance its influence in the wake of Trump's US foreign policy upset. Trump's shake-up was obvious even in the room of foreign ministers from the world's largest economies where Wang, China's most seasoned diplomat, spoke in South Africa last week. The absence of US Secretary of State Marco Rubio meant no high-ranking US diplomat was there to present an American counterpoint to a gathering of countries that make up 80% of the global population and three-quarters of international trade. On the surface, this shift has the potential to accelerate China's ascent as a global power, potentially granting the world's second-largest economy space to win more allies, boost its global leadership and shift global norms and rules – such as those on human rights or security – in its favor. But countries from Europe to Asia are well aware of the wide gap between Beijing's benign rhetoric and its behavior as it flouts a major international ruling to harass Philippine vessels in the South China Sea or intimidates Taiwan – the self-ruling democracy Bejing claims. Meanwhile, the Trump administration has signaled it wants to shift attention from other global conflicts to focus on its rivalry with China. And Beijing will face that and potential fresh US tariffs on its goods as it tries to revive a weak economy – limiting how much it can pour into expanding global influence. But even still, there are signs that China may see potential for those headwinds to just be some turbulence in a rise made easier by Trump's policies. 'Trump 2.0 era will undoubtedly weaken the US' leadership in international affairs,' an analysis published this month on the website of Shanghai-based think tank Fudan Development Institute said. 'As other countries, particularly the European Union and China, actively respond, the power vacuum left by the US withdrawal may be filled by them … With the US no longer able to dominate global issues as it once did, a new global governance structure may emerge,' it said. As Trump dismantles the US foreign aid sector – freezing funding to global education, health and development programs – some English-language arms of Chinese state media released scathing critiques of such assistance. Foreign aid is 'viewed by the US as a tool to maintain its hegemonic position and engage in geopolitical maneuvering,' nationalist tabloid the Global Times said in an article on USAID, an agency Beijing has long seen as a thorn in its side, accusing of sparking democratic 'color revolutions' and indoctrinating US proxies across the world. USAID, which was founded during the Cold War, has long played a key role in advancing American soft power and democratic ideals. Beijing, however, wasn't looking at Washington's aid freeze as an opportunity because – unlike the US – China treats 'other nations with sincerity, fairness, and selflessness,' an editorial by the state-run outlet claimed. There has been some indication China will take targeted steps to ramp up its support in regions it sees as strategically important in the wake of the US freeze – a move that would align with what experts have seen as a soft-power struggle between the two countries in recent decades. In Cambodia, for example, Beijing released $4.4 million for demining operations, as US-backed landmine removal programs were halted in eight provinces, the Associated Press reported, citing the Cambodian Mine Action Center. Overall, however, experts say there's little chance that Beijing would be able or willing to step up to fill the US aid void. China is a huge player in global development, funneling more than a trillion dollars into overseas projects between 2000 and 2021. But unlike the US, data show the vast majority of Beijing's development spending is not direct aid, but loans and other financing. And economic belt-tightening has seen Beijing move away from big-ticket commitments, like building railroads and power plants under Xi's signature Belt and Road overseas infrastructure drive, paring back to more modest projects in recent years. 'Trump is giving China some opportunity – but China might not be able to pick up this US gift,' said Shanghai-based foreign affairs analyst Shen Dingli. 'Due to our gloomy economy and the (downsized) version of Belt and Road … we have less money to buy loyalty.' Even still, China may look to capitalize on countries' uncertainty about the US to expand its trade and security ties, as well as access to critical minerals, observers say. And countries may take uncertainty in US relations – from the aid freeze to Trump's tariff threats – into calculations for dealing with the world's two largest economies. 'Beijing can send the message to the rest of the world … that the US is fundamentally going to be unreliable,' said Manoj Kewalramani, who heads Indo-Pacific studies at the Takshashila Institution research center in the Indian city of Bengaluru. 'Why would you want to pick a fight with Beijing now?' There are already signs of concern from some parts about Beijing's potential gains from a Trump-era pullback of US assistance. In an open letter to Trump posted on social platform X, Nepalese lawmaker Rajendra Bajgain last week warned that a 'vacuum created by reduced American involvement will inevitably be filled by other powers that do not share the values of democracy and free enterprise.' Two major US-funded infrastructure projects as well as other initiatives in Nepal have been put on hold following the US aid freeze, Reuters reported. In a response to a request for comment from CNN, China's Ministry of Foreign Affairs said that the US 'adjustments' were America's internal affairs, and that Beijing has 'consistently' provided assistance 'to the best of its ability.' China's aid 'aligns with the needs of recipient countries for socio-economic development and the improvement of people's livelihoods,' it said. But even as some of Trump's moves so far have created potential openings for Beijing, there's also the hanging question of how his administration may ultimately calibrate its aid and foreign policy – and its rivalry with China. When asked this month if the foreign aid shake-up was giving China and Russia an opportunity to expand their influence, national security adviser Mike Waltz told NBC's 'Meet the Press' that 'all too often these missions and these programs, number one, are not in line with strategic US interests like pushing back on China.' And speaking to European counterparts earlier this month, US defense chief Pete Hegseth warned that the US could no longer be 'primarily focused on the security of Europe.' Instead, the US is 'prioritizing deterring war with China in the Pacific,' he said. There have also been signs of Trump's brash diplomacy working against Beijing's benefit. Panama, the first country in Latin America to sign onto China's Belt and Road Initiative, announced it would pull out of the scheme after Trump repeatedly threatened to 'take back' the Panama Canal, falsely claiming Panama had ceded its operations to China. And in Europe, even as Trump officials lambasted European and NATO counterparts earlier this month and warmed to Russia, US allies there appeared galvanized, rather than dissuaded, to bolster NATO with more spending. That pivot will also mean Beijing is watching closely whether Washington is able to peel away its close ally Moscow, as the White House has signaled it may hope to do. Even still, Beijing will likely see the time as right to put more focus on repairing strained relations with Europe – a potential opening that could widen if Trump slaps tariffs on European goods. Trump has also so far not shaken US alliances in Asia, as Beijing may have hoped. And it's not clear that 'America First' will leave a security void in Asia or weaken the US alliance system there. The US president held seemingly successful meetings with Japanese Prime Minister Shigeru Ishiba and Indian counterpart Narendra Modi this month, and signaled support for the Pacific-focused AUKUS alliance of Canberra, London and Washington. And uncertainty or future demands from Trump could also strengthen arsenals and partnerships in the region. On Monday, US allies the Philippines and Japan agreed to further deepen their defense collaborations. Beijing, so far, has been seen as continuing to probe the limits of its own military muscle-flexing in the region, in recent days conducting what New Zealand said were unprecedented live-fire drills in the Tasman Sea. On Wednesday, Taiwan accused China of setting up a zone for 'live-fire training' without advance notice a day after the island's coast guard detained a Chinese-crewed cargo ship suspected of cutting an undersea cable in the Taiwan Strait. But Beijing will be carefully watching how Trump's policies and his allies' response to them weigh on its core ambitions to defend its territorial claims in the South China Sea – and take control of the self-ruling democracy of Taiwan. 'As long as the war in Europe would be put to an end, China's freedom of action in our part of the world might be more seriously checked and balanced,' said Shen in Shanghai. 'China must be watching, calculating how it should adjust its new approach to this fast-moving situation,' he said.
Yahoo
26-02-2025
- Business
- Yahoo
China sees opportunity in a world turned upside down by Trump
Editor's Note: Sign up for CNN's Meanwhile in China newsletter which explores what you need to know about the country's rise and how it impacts the world. President Donald Trump's upending of US foreign policy has alarmed allies and nations in need. His administration has frozen foreign aid, threatened to take control of other countries' sovereign territory, exited key international bodies and alienated Europe with an embrace of Russia. But the head-spinning set of moves, that together signal a retreat from leadership of a liberal order to 'America First,' is playing right into the messaging of the US' biggest rival. In this time of 'transformation and turbulence,' China has a vision for a 'safer world,' its top diplomat Wang Yi told G20 counterparts last week as he reiterated Beijing's pitch for 'a new path to security' without alliances, 'zero-sum' competition and 'bloc confrontation.' That vision – coded language for reshaping a world order China sees as unfairly dominated by the West – has been a cornerstone of Chinese leader Xi Jinping's push to step up as an alternative global leader to the US. And the drive has the potential to take on new relevance, observers say, as Beijing eyes the opportunities to advance its influence in the wake of Trump's US foreign policy upset. Trump's shake-up was obvious even in the room of foreign ministers from the world's largest economies where Wang, China's most seasoned diplomat, spoke in South Africa last week. The absence of US Secretary of State Marco Rubio meant no high-ranking US diplomat was there to present an American counterpoint to a gathering of countries that make up 80% of the global population and three-quarters of international trade. On the surface, this shift has the potential to accelerate China's ascent as a global power, potentially granting the world's second-largest economy space to win more allies, boost its global leadership and shift global norms and rules – such as those on human rights or security – in its favor. But countries from Europe to Asia are well aware of the wide gap between Beijing's benign rhetoric and its behavior as it flouts a major international ruling to harass Philippine vessels in the South China Sea or intimidates Taiwan – the self-ruling democracy Bejing claims. Meanwhile, the Trump administration has signaled it wants to shift attention from other global conflicts to focus on its rivalry with China. And Beijing will face that and potential fresh US tariffs on its goods as it tries to revive a weak economy – limiting how much it can pour into expanding global influence. But even still, there are signs that China may see potential for those headwinds to just be some turbulence in a rise made easier by Trump's policies. 'Trump 2.0 era will undoubtedly weaken the US' leadership in international affairs,' an analysis published this month on the website of Shanghai-based think tank Fudan Development Institute said. 'As other countries, particularly the European Union and China, actively respond, the power vacuum left by the US withdrawal may be filled by them … With the US no longer able to dominate global issues as it once did, a new global governance structure may emerge,' it said. As Trump dismantles the US foreign aid sector – freezing funding to global education, health and development programs – some English-language arms of Chinese state media released scathing critiques of such assistance. Foreign aid is 'viewed by the US as a tool to maintain its hegemonic position and engage in geopolitical maneuvering,' nationalist tabloid the Global Times said in an article on USAID, an agency Beijing has long seen as a thorn in its side, accusing of sparking democratic 'color revolutions' and indoctrinating US proxies across the world. USAID, which was founded during the Cold War, has long played a key role in advancing American soft power and democratic ideals. Beijing, however, wasn't looking at Washington's aid freeze as an opportunity because – unlike the US – China treats 'other nations with sincerity, fairness, and selflessness,' an editorial by the state-run outlet claimed. There has been some indication China will take targeted steps to ramp up its support in regions it sees as strategically important in the wake of the US freeze – a move that would align with what experts have seen as a soft-power struggle between the two countries in recent decades. In Cambodia, for example, Beijing released $4.4 million for demining operations, as US-backed landmine removal programs were halted in eight provinces, the Associated Press reported, citing the Cambodian Mine Action Center. Overall, however, experts say there's little chance that Beijing would be able or willing to step up to fill the US aid void. China is a huge player in global development, funneling more than a trillion dollars into overseas projects between 2000 and 2021. But unlike the US, data show the vast majority of Beijing's development spending is not direct aid, but loans and other financing. And economic belt-tightening has seen Beijing move away from big-ticket commitments, like building railroads and power plants under Xi's signature Belt and Road overseas infrastructure drive, paring back to more modest projects in recent years. 'Trump is giving China some opportunity – but China might not be able to pick up this US gift,' said Shanghai-based foreign affairs analyst Shen Dingli. 'Due to our gloomy economy and the (downsized) version of Belt and Road … we have less money to buy loyalty.' Even still, China may look to capitalize on countries' uncertainty about the US to expand its trade and security ties, as well as access to critical minerals, observers say. And countries may take uncertainty in US relations – from the aid freeze to Trump's tariff threats – into calculations for dealing with the world's two largest economies. 'Beijing can send the message to the rest of the world … that the US is fundamentally going to be unreliable,' said Manoj Kewalramani, who heads Indo-Pacific studies at the Takshashila Institution research center in the Indian city of Bengaluru. 'Why would you want to pick a fight with Beijing now?' There are already signs of concern from some parts about Beijing's potential gains from a Trump-era pullback of US assistance. In an open letter to Trump posted on social platform X, Nepalese lawmaker Rajendra Bajgain last week warned that a 'vacuum created by reduced American involvement will inevitably be filled by other powers that do not share the values of democracy and free enterprise.' Two major US-funded infrastructure projects as well as other initiatives in Nepal have been put on hold following the US aid freeze, Reuters reported. In a response to a request for comment from CNN, China's Ministry of Foreign Affairs said that the US 'adjustments' were America's internal affairs, and that Beijing has 'consistently' provided assistance 'to the best of its ability.' China's aid 'aligns with the needs of recipient countries for socio-economic development and the improvement of people's livelihoods,' it said. But even as some of Trump's moves so far have created potential openings for Beijing, there's also the hanging question of how his administration may ultimately calibrate its aid and foreign policy – and its rivalry with China. When asked this month if the foreign aid shake-up was giving China and Russia an opportunity to expand their influence, national security adviser Mike Waltz told NBC's 'Meet the Press' that 'all too often these missions and these programs, number one, are not in line with strategic US interests like pushing back on China.' And speaking to European counterparts earlier this month, US defense chief Pete Hegseth warned that the US could no longer be 'primarily focused on the security of Europe.' Instead, the US is 'prioritizing deterring war with China in the Pacific,' he said. There have also been signs of Trump's brash diplomacy working against Beijing's benefit. Panama, the first country in Latin America to sign onto China's Belt and Road Initiative, announced it would pull out of the scheme after Trump repeatedly threatened to 'take back' the Panama Canal, falsely claiming Panama had ceded its operations to China. And in Europe, even as Trump officials lambasted European and NATO counterparts earlier this month and warmed to Russia, US allies there appeared galvanized, rather than dissuaded, to bolster NATO with more spending. That pivot will also mean Beijing is watching closely whether Washington is able to peel away its close ally Moscow, as the White House has signaled it may hope to do. Even still, Beijing will likely see the time as right to put more focus on repairing strained relations with Europe – a potential opening that could widen if Trump slaps tariffs on European goods. Trump has also so far not shaken US alliances in Asia, as Beijing may have hoped. And it's not clear that 'America First' will leave a security void in Asia or weaken the US alliance system there. The US president held seemingly successful meetings with Japanese Prime Minister Shigeru Ishiba and Indian counterpart Narendra Modi this month, and signaled support for the Pacific-focused AUKUS alliance of Canberra, London and Washington. And uncertainty or future demands from Trump could also strengthen arsenals and partnerships in the region. On Monday, US allies the Philippines and Japan agreed to further deepen their defense collaborations. Beijing, so far, has been seen as continuing to probe the limits of its own military muscle-flexing in the region, in recent days conducting what New Zealand said were unprecedented live-fire drills in the Tasman Sea. On Wednesday, Taiwan accused China of setting up a zone for 'live-fire training' without advance notice a day after the island's coast guard detained a Chinese-crewed cargo ship suspected of cutting an undersea cable in the Taiwan Strait. But Beijing will be carefully watching how Trump's policies and his allies' response to them weigh on its core ambitions to defend its territorial claims in the South China Sea – and take control of the self-ruling democracy of Taiwan. 'As long as the war in Europe would be put to an end, China's freedom of action in our part of the world might be more seriously checked and balanced,' said Shen in Shanghai. 'China must be watching, calculating how it should adjust its new approach to this fast-moving situation,' he said.
CNN
26-02-2025
- Business
- CNN
China sees opportunity in a world turned upside down by Trump
President Donald Trump's upending of US foreign policy has alarmed allies and nations in need. His administration has frozen foreign aid, threatened to take control of other countries' sovereign territory, exited key international bodies and alienated Europe with an embrace of Russia. But the head-spinning set of moves, that together signal a retreat from leadership of a liberal order to 'America First,' is playing right into the messaging of the US' biggest rival. In this time of 'transformation and turbulence,' China has a vision for a 'safer world,' its top diplomat Wang Yi told G20 counterparts last week as he reiterated Beijing's pitch for 'a new path to security' without alliances, 'zero-sum' competition and 'bloc confrontation.' That vision – coded language for reshaping a world order China sees as unfairly dominated by the West – has been a cornerstone of Chinese leader Xi Jinping's push to step up as an alternative global leader to the US. And the drive has the potential to take on new relevance, observers say, as Beijing eyes the opportunities to advance its influence in the wake of Trump's US foreign policy upset. Trump's shake-up was obvious even in the room of foreign ministers from the world's largest economies where Wang, China's most seasoned diplomat, spoke in South Africa last week. The absence of US Secretary of State Marco Rubio meant no high-ranking US diplomat was there to present an American counterpoint to a gathering of countries that make up 80% of the global population and three-quarters of international trade. On the surface, this shift has the potential to accelerate China's ascent as a global power, potentially granting the world's second-largest economy space to win more allies, boost its global leadership and shift global norms and rules – such as those on human rights or security – in its favor. But countries from Europe to Asia are well aware of the wide gap between Beijing's benign rhetoric and its behavior as it flouts a major international ruling to harass Philippine vessels in the South China Sea or intimidates Taiwan – the self-ruling democracy Bejing claims. Meanwhile, the Trump administration has signaled it wants to shift attention from other global conflicts to focus on its rivalry with China. And Beijing will face that and potential fresh US tariffs on its goods as it tries to revive a weak economy – limiting how much it can pour into expanding global influence. But even still, there are signs that China may see potential for those headwinds to just be some turbulence in a rise made easier by Trump's policies. 'Trump 2.0 era will undoubtedly weaken the US' leadership in international affairs,' an analysis published this month on the website of Shanghai-based think tank Fudan Development Institute said. 'As other countries, particularly the European Union and China, actively respond, the power vacuum left by the US withdrawal may be filled by them … With the US no longer able to dominate global issues as it once did, a new global governance structure may emerge,' it said. As Trump dismantles the US foreign aid sector – freezing funding to global education, health and development programs – some English-language arms of Chinese state media released scathing critiques of such assistance. Foreign aid is 'viewed by the US as a tool to maintain its hegemonic position and engage in geopolitical maneuvering,' nationalist tabloid the Global Times said in an article on USAID, an agency Beijing has long seen as a thorn in its side, accusing of sparking democratic 'color revolutions' and indoctrinating US proxies across the world. USAID, which was founded during the Cold War, has long played a key role in advancing American soft power and democratic ideals. Beijing, however, wasn't looking at Washington's aid freeze as an opportunity because – unlike the US – China treats 'other nations with sincerity, fairness, and selflessness,' an editorial by the state-run outlet claimed. There has been some indication China will take targeted steps to ramp up its support in regions it sees as strategically important in the wake of the US freeze – a move that would align with what experts have seen as a soft-power struggle between the two countries in recent decades. In Cambodia, for example, Beijing released $4.4 million for demining operations, as US-backed landmine removal programs were halted in eight provinces, the Associated Press reported, citing the Cambodian Mine Action Center. Overall, however, experts say there's little chance that Beijing would be able or willing to step up to fill the US aid void. China is a huge player in global development, funneling more than a trillion dollars into overseas projects between 2000 and 2021. But unlike the US, data show the vast majority of Beijing's development spending is not direct aid, but loans and other financing. And economic belt-tightening has seen Beijing move away from big-ticket commitments, like building railroads and power plants under Xi's signature Belt and Road overseas infrastructure drive, paring back to more modest projects in recent years. 'Trump is giving China some opportunity – but China might not be able to pick up this US gift,' said Shanghai-based foreign affairs analyst Shen Dingli. 'Due to our gloomy economy and the (downsized) version of Belt and Road … we have less money to buy loyalty.' Even still, China may look to capitalize on countries' uncertainty about the US to expand its trade and security ties, as well as access to critical minerals, observers say. And countries may take uncertainty in US relations – from the aid freeze to Trump's tariff threats – into calculations for dealing with the world's two largest economies. 'Beijing can send the message to the rest of the world … that the US is fundamentally going to be unreliable,' said Manoj Kewalramani, who heads Indo-Pacific studies at the Takshashila Institution research center in the Indian city of Bengaluru. 'Why would you want to pick a fight with Beijing now?' There are already signs of concern from some parts about Beijing's potential gains from a Trump-era pullback of US assistance. In an open letter to Trump posted on social platform X, Nepalese lawmaker Rajendra Bajgain last week warned that a 'vacuum created by reduced American involvement will inevitably be filled by other powers that do not share the values of democracy and free enterprise.' Two major US-funded infrastructure projects as well as other initiatives in Nepal have been put on hold following the US aid freeze, Reuters reported. In a response to a request for comment from CNN, China's Ministry of Foreign Affairs said that the US 'adjustments' were America's internal affairs, and that Beijing has 'consistently' provided assistance 'to the best of its ability.' China's aid 'aligns with the needs of recipient countries for socio-economic development and the improvement of people's livelihoods,' it said. But even as some of Trump's moves so far have created potential openings for Beijing, there's also the hanging question of how his administration may ultimately calibrate its aid and foreign policy – and its rivalry with China. When asked this month if the foreign aid shake-up was giving China and Russia an opportunity to expand their influence, national security adviser Mike Waltz told NBC's 'Meet the Press' that 'all too often these missions and these programs, number one, are not in line with strategic US interests like pushing back on China.' And speaking to European counterparts earlier this month, US defense chief Pete Hegseth warned that the US could no longer be 'primarily focused on the security of Europe.' Instead, the US is 'prioritizing deterring war with China in the Pacific,' he said. There have also been signs of Trump's brash diplomacy working against Beijing's benefit. Panama, the first country in Latin America to sign onto China's Belt and Road Initiative, announced it would pull out of the scheme after Trump repeatedly threatened to 'take back' the Panama Canal, falsely claiming Panama had ceded its operations to China. And in Europe, even as Trump officials lambasted European and NATO counterparts earlier this month and warmed to Russia, US allies there appeared galvanized, rather than dissuaded, to bolster NATO with more spending. That pivot will also mean Beijing is watching closely whether Washington is able to peel away its close ally Moscow, as the White House has signaled it may hope to do. Even still, Beijing will likely see the time as right to put more focus on repairing strained relations with Europe – a potential opening that could widen if Trump slaps tariffs on European goods. Trump has also so far not shaken US alliances in Asia, as Beijing may have hoped. And it's not clear that 'America First' will leave a security void in Asia or weaken the US alliance system there. The US president held seemingly successful meetings with Japanese Prime Minister Shigeru Ishiba and Indian counterpart Narendra Modi this month, and signaled support for the Pacific-focused AUKUS alliance of Canberra, London and Washington. And uncertainty or future demands from Trump could also strengthen arsenals and partnerships in the region. On Monday, US allies the Philippines and Japan agreed to further deepen their defense collaborations. Beijing, so far, has been seen as continuing to probe the limits of its own military muscle-flexing in the region, in recent days conducting what New Zealand said were unprecedented live-fire drills in the Tasman Sea. On Wednesday, Taiwan accused China of setting up a zone for 'live-fire training' without advance notice a day after the island's coast guard detained a Chinese-crewed cargo ship suspected of cutting an undersea cable in the Taiwan Strait. But Beijing will be carefully watching how Trump's policies and his allies' response to them weigh on its core ambitions to defend its territorial claims in the South China Sea – and take control of the self-ruling democracy of Taiwan. 'As long as the war in Europe would be put to an end, China's freedom of action in our part of the world might be more seriously checked and balanced,' said Shen in Shanghai. 'China must be watching, calculating how it should adjust its new approach to this fast-moving situation,' he said.
