Market diversification helps counter tariffs

China's policymakers vowed during the two sessions to bolster policies for stabilizing foreign trade and support enterprises in securing orders and exploring new markets as escalating tensions with the United States due to Washington's tariff hikes dampen normal trade activity, analysts and executives said.

China's export product mix toward greener, more digitalized and higher-end offerings is strengthening the country's competitiveness and adaptability in the face of evolving trade dynamics. Also, its vast domestic consumer base provides a steadily growing market for quality imports, they said during the ongoing annual meetings of China's top legislative and political advisory bodies.

"Regardless of changes in the external environment, we should remain steadfast in our commitment to opening-up," said Premier Li Qiang on Wednesday while delivering the Government Work Report, detailing the world's second-largest economy's trade policies for the rest of the year.

Within just the first month of his presidency, US President Donald Trump has twice imposed additional 10 percent tariffs on Chinese exports. Each additional 10 percent increase in US tariffs could result in a 2-2.5 percent drop in China's export performance, said Lian Ping, president of the China Chief Economist Forum.

"The impact of the US tariffs is only just beginning to come to the fore," Lian said, cautioning that the external environment facing China in 2025 is poised to become "even more intricate and fraught with uncertainty".

Despite the headwinds, the country's foreign trade landscape is benefiting from favorable conditions amid the broader global economic recovery, Lian added.

According to the World Trade Organization, global merchandise trade is projected to grow by 3 percent year-on-year in 2025, higher than last year's growth target, providing an enabling climate for China's continued expansion in overseas markets.

The ability to constantly innovate and bring forth technologically advanced, higher value-added and lower carbon emission products is a crucial competitive advantage for China's exports, said Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation.

China's annual production of new energy vehicles exceeded 10 million units for the first time in 2024, with exports crossing the 2 million mark, said the China Association of Automobile Manufacturers.

This will help the country to carve out a position in the global marketplace and remain resilient amid growing protectionism and intensifying geopolitical tensions, Bai said.

Meanwhile, China is proactively shielding its global supply chains from external shocks by cultivating a more diverse set of trading partners as well as deepening regional integration.

In 2024, China's exports to other countries participating in the Belt and Road Initiative grew 9.6 percent year-on-year, while exports to ASEAN increased 13.4 percent, to Brazil by 23.3 percent, to the United Arab Emirates by 19.2 percent and to Saudi Arabia by 18.2 percent, said the General Administration of Customs.

These figures significantly outpaced the growth rates in China's exports to its traditional markets, such as the European Union and the US, which stood at 4.3 percent and 6.1 percent year-on-year, respectively, the administration said.

"In the face of the constantly changing global trade landscape, we must continuously explore new emerging markets," said Lu Xiaojie, head of Jiangsu province-based Nantong Winner Sports Goods Co Ltd.

The company, specializing in the production of a wide range of sporting goods, had previously focused on the US market. However, in recent years, the company has proactively adjusted its marketing strategy, placing countries participating in the Belt and Road Initiative as key targets for market expansion.

"Currently, our share of the US market has declined from the peak of around 40 percent to about 10 percent, but we have successfully developed new markets in South America, Africa and other emerging regions, effectively offsetting the reduction in our traditional markets. We expect our export volume to increase by around 20 to 30 percent this year," Lu said.

Meanwhile, China places equal emphasis on opening up its markets and scaling up quality imports. China's imports reached a record-breaking 18 trillion yuan ($2.49 trillion) in 2024, up 2.3 percent year-on-year, cementing the country's position as the world's second-largest import market for the 16th consecutive year, said the Ministry of Commerce.

China's vast market size, diverse consumer demand and immense growth potential remain unchanged. The country's unwavering commitment to implementing effective import policies continues to drive this impressive performance, said He Yadong, a spokesperson for the ministry.

China's transformation of its massive domestic market into a shared global marketplace is injecting new momentum into the development of the world economy, He said.