Renewed US trade war threatens China’s ‘lifeline’

China might not be able to rely on trade to steer it out of trouble as blistering tariffs being considered by US President-elect Donald Trump threaten an already struggling economy.Exports have historically represented a key engine in the world’s number two economy, where authorities will release 2024 growth data on Friday that is expected to be among the lowest in decades.Worse still, Trump’s return to the White House three days later could mean that Beijing won’t be able to rely on trade to drive activity in 2025.Exports “are likely to stay resilient in the near-term”, wrote Zichun Huang of Capital Economics, noting that a recent surge was due in part to US importers stockpiling Chinese goods ahead of expected tariff hikes.”But outbound shipments will weaken later this year if Trump follows through on his threat to impose 60 percent tariffs on all Chinese goods,” she said.China’s economy likely grew 4.9 percent last year, according to an AFP survey of experts, fractionally short of the government’s five percent target and down from 5.2 percent in 2023.The increase — already the lowest in decades, apart from the Covid-19 pandemic — was helped by a record-setting year for Chinese exports.Overseas shipments reached a historic high of nearly $3.5 trillion in 2024, up 7.1 percent year-on-year, according to official statistics published on Monday.Adjusted for inflation, China’s trade surplus last year “outstripped any global surplus seen in the past century, overshadowing even the historical export powerhouses like Germany, Japan or the United States post-World War II”, wrote Stephen Innes of SPI Asset Management in a note.The increase in China’s trade surplus has contributed five to six points to the growth of the country’s gross domestic product over the past three years, Francois Chimits of the Mercator Institute for China Studies told AFP.”The vitality of foreign trade has been one of the lifelines of the Chinese economy,” he said.- Policy support -That pillar of growth could come under attack in 2025, as the United States and European countries retaliate against what they call unfair competition resulting from China’s generous subsidies to its manufacturers.The European Union imposed additional customs duties in October on electric vehicles imported from China, citing distortionary trade practices by Beijing.And Trump promised during his recent US presidential campaign to slap even heftier tariffs on Chinese goods than those implemented in his first term.The specific trade imposts Trump intends to levy against China are not yet clear but the country’s export surge last year “will ignite further fury among US trade hawks”, Innes said.A potential 20 percent increase in US levies on Chinese goods would result in a 0.7-percentage-point hit to real GDP this year, according to a Goldman Sachs report.Beijing could allow the yuan to weaken in return, “pre-position” exports in third countries so that they can then be sent to the United States, or simply find new markets, Agatha Kratz of Rhodium Group told AFP.Some shifts are already palpable. China’s exports to Vietnam increased by nearly 18 percent last year, according to Chinese customs data, overtaking Japan to become its third-largest export destination.Domestically, Beijing is hoping to boost demand this year through a combination of fiscal and monetary policy easing and a scheme to spur consumption.The external pressure this year might necessitate even greater domestic policy support from Beijing, said Larry Hu, an economist at Macquarie Group.AFP’s survey of analysts warned that China’s growth rate could ease to just 4.4 percent this year and even drop below four percent in 2026.

China’s economy seen slowing further in 2024: AFP survey

China’s economic growth likely fell fractionally short of the government’s five percent target last year, according to an AFP survey, as leaders head into 2025 steeling for the second presidency of Donald Trump amid fears of another painful trade standoff.The reading would be the weakest the country has seen since 1990 — outside of the pandemic — as it struggles with weak domestic consumption and a protracted crisis in the once-booming property sector.The survey of economists by AFP estimated growth in the world’s number two economy hit 4.9 percent last year, down from the 5.2 percent recorded in 2023.They also warned it could ease to just 4.4 percent this year and even drop below four percent in 2026.The 2024 reading would be just shy of Beijing’s target of “around five percent” — reiterated by President Xi Jinping late last year — and likely “close enough for officials to claim success”, Harry Murphy Cruise from Moody’s Analytics told AFP.”But do not let that achievement fool you. Under the hood, the economy’s engine is struggling to get into gear,” he warned.However, Francois Chimits from the Mercator Institute for China Studies said the figure should be regarded with some scepticism as it is “often subject to strategic adjustments to reflect internal objectives”.China’s economy has so far failed to achieve a robust post-pandemic recovery as a prolonged real estate crisis spooks consumers and investors, while local governments grapple with soaring debt.Woes in the property sector are particularly concerning given the vital role it plays in fuelling growth, Chimits said.Friday’s report comes after data last week showed the country narrowly avoided slipping into deflation last month as consumers remain wary of pulling out their wallets.Beijing has recently unveiled some of the most aggressive measures in years aimed at boosting activity, including cuts to key interest rates, the easing of property purchase rules, hiking the debt ceiling for local governments and bolstering support for financial markets.- Trump 2.0 -Coupled with strong overseas demand for Chinese products — last year’s exports reached a historic high — the measures have contributed to a moderate rebound in the final quarter, experts told AFP.Without the measures, consumption would have been “much worse”, said Michelle Lam, an economist at Societe Generale.”Beijing has made some tweaks to support the buying of unsold properties by local governments,” Lam told AFP.”But the implementation has still been slow.”In one encouraging sign for the real estate sector, the total area of new residential property transactions in major cities increased 18 percent on-year in December, the finance ministry announced this month.Compounding the issues heading for Beijing is the return of Trump to the White House next week after he pledged during his campaign to impose tougher trade measures against China than those he unleashed during his first term.A hike in tariffs could batter Chinese exports — a key economic pillar made even more vital in the absence of vigorous domestic demand.A potential 20 percent increase in US levies on Chinese goods would result in a 0.7-percentage-point hit to real GDP this year, according to a Goldman Sachs report.In a move to shore up the economy in preparation for any possible headwinds, Beijing has announced a relaxation of fiscal policy in 2025 and a plan to boost consumption by subsidising the replacement of old household items.With exports facing greater uncertainty and the property sector stagnating, “officials need a new growth driver”, said Murphy Cruise.”Households could be that engine.”External pressure this year might necessitate even greater domestic policy support from Beijing, said Larry Hu, economist at Macquarie Group.That could represent a “paradigm shift, with domestic demand outpacing external demand” as it did in 2009-19, he wrote.Still, economists remain sceptical about the scale of upcoming stimulus measures, the details of which are unlikely to be revealed until China’s annual parliamentary session in March.”Officials will ramp up support, but it will not offset the pain of higher tariffs,” Murphy Cruise warned.

Musk, Bezos, Zuckerberg to attend Trump inauguration: report

Billionaires Elon Musk, Jeff Bezos and Mark Zuckerberg will attend Donald Trump’s inauguration next week, NBC news reported Tuesday, further highlighting the tech moguls’ efforts to develop closer ties with the incoming president.The network, citing an unnamed official involved in planning the January 20 ceremony, said the three men will be seated together on the platform with prominent guests, including Trump cabinet nominees. Musk — the CEO of Tesla and SpaceX and the majority owner of X — has become one of Trump’s closest allies and his planned presence at the ceremony is not a surprise. Musk shares Trump’s hard-right politics and put millions of dollars into supporting his presidential campaign.Trump has tapped Musk to co-lead an advisory commission aiming to slash federal spending and bureaucracy, which while dubbed the Department of Government Efficiency, or “DOGE,” will not be an official US agency.   Bezos and Zuckerberg have less close ties with Trump, but both have made moves since the election viewed as seeking to curry favor with the president-elect, including meeting with him at his Mar-a-Lago resort.Meta CEO Zuckerberg signalled a rightward political swerve last week when he announced Facebook and Instagram would scrap fact-checking in the United States, a response to what he characterized as censorship by governments and so-called legacy media.The pivot to Trumpian talking points shocked some Meta watchers but was also in line past decisions by Zuckerberg aimed at preserving his dominance of social media.In the summer, Trump threatened to put Zuckerberg in prison over Facebook’s decision to ban him from the platform in 2021.Highlighting Zuckerberg’s continued step into politics, he will be co-hosting a post-inauguration reception for Trump with several well-known Republican donors, according to an invitation obtained by the Puck news site Tuesday.Bezos’s relationship with Trump has also seen moments of significant friction. The founder of Amazon also owns The Washington Post, one of the many newspapers Trump has railed against for years.In a decision that shocked many in US media, The Post declined to endorse a presidential candidate ahead of the November election.According to a report by the paper, Bezos intervened to block the board from publishing its editorial in favor of Vice President Kamala Harris.The paper’s leadership denied that report. Bezos’s aerospace company Blue Origin also competes for lucrative government contracts.

Federal probe begins into deadly Los Angeles fires

A huge federal probe was under way Tuesday into what caused the deadly Los Angeles wildfires, with millions in the city clamoring for answers.Social media has exploded with theories about what started blazes that tore through the city of Altadena and the upmarket neighborhood of Pacific Palisades, killing at least 24 people and leaving whole communities in ruins.Suggestions include downed power lines, deliberate arson, a stray firework and the reignition of an earlier fire.But Jose Medina of the federal Bureau of Alcohol Tobacco and Firearms (ATF), which is leading the inquiry, said it was too early to say.”We know everyone wants answers, and the community deserves answers. ATF will give you those answers, but it will be once we complete a thorough investigation,” he told reporters.The ATF is working with local law enforcement, as well as the Forest Service and the US Attorney’s office, in an operation that will involve around 75 people.Fire investigators, chemists, electrical engineers and sniffer dogs trained to detect accelerant will be doing painstaking fieldwork to find the seats of the two fires, he said.A team will also be deployed to gather clues from the local community and online, conducting interviews with possible witnesses.”We are following all the leads and processing all the physical evidence,” Medina said.”ATF is determined to leverage every available resource to deliver a thorough and transparent investigation.”Internet users have leapt on a video posted by trail runners that shows them running away from smoke in hills above Pacific Palisades.But one of the men, Beni Oren, told the Los Angeles Times they had nothing to do with the fire, and had actually been fleeing for their lives in the video.”It’s definitely kind of infuriating that people are blaming us,” he told the paper.”Just knowing as a matter of fact… that we didn’t do it but then seeing the amount of people that have different theories is overwhelming.”Local media reported that a number of homeowners in the Altadena area have launched a lawsuit against power company Southern California Edison after a video appeared to show flames at the base of an electrical transmission tower.The utility has said it does not believe its equipment was at fault.

‘Disaster’: China’s asylum seekers fear Trump deportation threat

Fear drove them out of China — over oceans and continents, through rainforests and mountains, seeking safety and opportunity in the United States. Now, as Donald Trump’s second presidency looms, Chinese asylum seekers are once again afraid.Trump, who takes power again on January 20, has vowed mass deportations backed by the military, putting the promise at the heart of his rhetoric targeting illegal immigrants on the campaign trail that helped catapult him to victory. That has left the fate of Beijing critics and others who fear persecution in China unclear.”If I were repatriated, it would be a disaster for my family and I,” said Huang Haimin, 42, who entered the United States in early 2023.”I’m not worried; I’m fearful,” he told AFP. “I’ve been afraid for much of my life back home, but now I feel it here too.”Huang decided to leave China after sensing he might face trouble with authorities over gatherings with critics of Beijing’s zero-Covid policy, as many were at the time.Like others, he researched his journey on Douyin, China’s version of TikTok.His months-long journey to the United States passed through Turkey and Panama, before he reached Mexico and crossed the border.”We took mountainous roads for two days. That was tough,” Huang, now in Brooklyn, said of his trek through the Darien Gap, a stretch of untamed rainforest connecting Colombia and Panama.He then became part of the surge of Chinese migrants entering the United States illegally from Mexico in 2023 — more than 37,400 were encountered by authorities that year, up from some 3,800 in 2022. Numbers have fallen again in recent months, but that did not stop Trump from voicing fears on the campaign trail last year that “military age” men from China were trying to form an “army in our country.”- ‘Walking the line’ -Many Chinese immigrants end up in Queens, New York, where Ma Ju started a private shelter nearly two years ago.He recalls being contacted daily by two to three new undocumented arrivals from China in early 2023, an increase from the 20 to 30 requests for help he used to receive annually.Ma, who moved to the United States in 2019, has been outspoken on Beijing’s human rights record, including in northwestern Xinjiang where Uyghurs and other Muslim minorities were said to have been incarcerated.He said: “95 percent of people I receive here ‘walked the line’.”He was using a euphemism for migrating into the United States through South America, often by walking across the Mexico border.”I couldn’t arrange accommodation for them,” he added. “I thought, it was time to find a house.”He estimates taking in more than 350 migrants since opening the shelter. Some stayed for three days and others, over a year.While many were Han, the largest ethnic group in China, there were also Christians and significant numbers from Muslim minority groups.”Everyone worries, and I worry for them,” Ma said of potential deportations under Trump.He helps new immigrants consult lawyers as they navigate asylum-seeking. Many are still awaiting court decisions on their applications.”I tell them not to be too afraid,” he said, citing America’s separation of judicial and political powers.Currently, some asylum seekers are allowed in, as they wait for their cases to be heard in court.- At a loss -Kurbanjan Barat, 41, a shelter resident who left Xinjiang for Turkey before fleeing for the United States, is holding out hope.”I don’t believe that Trump would deport Uyghur refugees who came to the United States seeking asylum,” he told AFP.Washington has accused Beijing of genocide against Uyghurs and other minority groups in Xinjiang.He added that he believes Washington “will not hand over human lives that have survived and escaped danger” to an oppressive regime.But Yang Qinxue, 36, worries Trump will act fast on immigration.He recounted entering the country by traveling through Europe to Mexico, before crossing the border with his family.”Trump might prioritize policies of dealing with illegal immigrants,” he said, noting this affects public sentiment.Yang, who said he faced pressure in China for being critical of authorities online, added that he would be at a loss if forced to leave the United States.”I’ll try my best to learn from locals humbly,” he said.”New York’s open and inclusive stance does make me feel more secure.”

Starbucks shift on non-paying visitors stirs debate in US

Starbucks has stirred the coffee pot by reversing a policy that allowed anyone to use its bathrooms, with the US public warned they’ll need to buy something or get out.In a new code of conduct issued Monday, the hot drink behemoth that boasts 29,000 retail stores in 78 markets said it wanted  “to ensure our spaces are prioritized for use by our customers.”That includes the chain’s cafes, patios and restrooms, according to the policy, which Starbucks noted is something most retailers enforce.US retailers like Starbucks that bill themselves as a so-called “third space” — a gathering place outside the home or office — face a dilemma in a country where public restrooms are sparse.The question of bathroom access has been a fraught one for Starbucks, with the issue thrust into the spotlight in 2018 when two Black men were refused access to a branch bathroom while they waited for a friend.When they sat in the Philadelphia location’s seating area without ordering, staff called the police, sparking a PR disaster. The men were arrested but never charged.Following the debacle, Starbucks adopted an “open bathroom” policy meaning its restrooms — at the cafes that had them — would be open to all.But in 2022 interim chief executive Howard Schultz said the policy might have to end, owing to safety issues from people with mental health problems.- ‘Harden our stores’ -“We have to harden our stores and provide safety for our people,” Schultz said at the time. “I don’t know if we can keep our bathrooms open.”In one busy Manhattan location, where the policy was not yet displayed on the door as planned, a barista who declined to be named said “people are still gonna try and go in there — the homeless of course — that’s for sure.”The Midtown branch was equipped with a single toilet, fitted with a numerical lock, with a steady stream of people using the facility after obtaining the code from staff.”But if people follow the rules it should be better,” the barista added, suggesting the policy would make life easier for staff.At another location a few blocks away, an employee said “it’s fine” for non-paying visitors to use the restroom and the cafe seating area, apparently unaware of the new policy.Starbucks customer Noelle Devoe speculated on X that the policy would not be used against “college kids or professionals.” “It’ll just be a way for them to kick out those they feel are undesirable,” she said.Starbucks posted a 3 percent decline in global net revenue for the fourth quarter year-on-year, to $9.1 billion, in October 2024.The results showed that sales are continuing to fall, as the new CEO vowed a strategic overhaul to turn the company around.The caffeinated giant claims in its corporate motto to be “nurturing the human spirit… one neighborhood at a time.”