Dr. Yan Liang is Chair Professor of Economics at Willamette University.
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00:00And let's talk a bit more about all of this with Yan Liang, who is Chair Professor of Economics at Willamette University.
00:06Welcome back to the program. Good to see you.
00:08So do these figures tell a story of a China that has adapted in the face of U.S. tariffs?
00:14Yeah, good to be with you.
00:16So I think, first of all, this number definitely shows that China's exports performance remains very resilient despite this tariff war.
00:23But at the same time, I think April is still rather early to see really the full impact of tariff war.
00:30Just because a lot of the orders have been already placed.
00:33And so the shipment happened in April.
00:36So that's why when you look at the yuan value, the exports to the United States has only gone down by 1.5 percent in April.
00:44But I think, you know, with the tariff trickle in more, we're likely to see more damage to the export performance.
00:52But that said, I think I agree with you.
00:54So when you look at the breakdown, China has been able to expand export destinations with ASEAN countries, with the EU, with many of the BRI countries.
01:03And so that really helped to cushion the tariff imposition from the United States.
01:08And also China's trade structure has really been improving.
01:10So you see a lot of these products from China are very competitive.
01:14And it's very difficult for other countries to fight replacements, including the United States.
01:18And so I think that is why this really support this very strong export performance in April.
01:24And so looking at other markets, we were just seeing that trade with the European Union and Southeast Asia in particular is up.
01:30Does that show that there really is healthy appetite for Chinese goods in these regions and countries?
01:37Absolutely.
01:38As I just mentioned, you know, ASEAN now is actually accounting for 16.8 percent of the total Chinese trade.
01:43And the EU comes at the second, accounting for about 12.6 percent.
01:47And the United States is actually the third, accounting only for about 10.2 percent of China's total trade.
01:53And all of this is measured in the RMB released by the customs.
01:57So as you just mentioned, many of these countries do have very close heights with China when it comes to trading relations.
02:05And ASEAN countries, of course, they import from China.
02:08And a lot of times they process the imports and intermediate goods and use the machinery and other equipment, help to produce their own exports to other countries.
02:17So I think, you know, there is very robust trading relationships with China, you know, among the ASEAN countries and also EU countries.
02:24So I think, you know, diversifying China's export destinations have been really important for China to weather through this kind of external shocks coming from the United States.
02:33Now, tomorrow, Saturday is a big day, isn't it, these trade talks between the United States and China.
02:38Do you think that these trade figures could strengthen China's hands in these talks?
02:44I think so.
02:45I think, you know, the trade talk between the U.S. and U.K. seems to suggest that the U.S. is, you know, will hold the ground, so to speak, right?
02:53They are actually difficult to negotiate with, you know, U.K.'s case.
02:57U.K. is actually running a trade surplus with the United States, and yet the U.S. is, the tariff with U.K. has elevated from the previous about 3 percent to now 10 percent.
03:06So I think the negotiations will be tough.
03:08And so I think with this very robust trade performance coming into the negotiation, I do think that helped to strengthen China's position.
03:15Not to mention, it also helped boost the domestic confidence in weather through these kinds of external shocks.
03:21But that said, I think it is hopeful, as now these two countries now agree to meet and talk.
03:27I think just that sentiment, that the changes in tone, I think will help to improve the relationships going forward.
03:33Well, hopefully we will find out a bit more tomorrow.
03:36Yan Yang, thank you so much.
03:37We really appreciate your insights, as ever.
03:39Chair Professor of Economics at Willamette University in Portland, Oregon, Yan Yang.