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People’s Daily Editorial Downplays U.S.-China Trade Deficit, Blames U.S. Economic Structure

People’s Daily recently published an editorial under its pen name Zhongsheng (a homophone for “China’s Voice”) addressing the trade imbalance between China and the United States. The piece argued that the U.S. trade deficit with China is not as severe as portrayed and is primarily the result of structural issues within the U.S. economy.

“The U.S. trade deficit with China in goods is not only a natural outcome of structural issues within the U.S. economy, but also a result of the two countries’ comparative advantages and the current pattern of international division of labor,” the editorial stated.

The article presented several key arguments:

  • Services Trade: In 2024, the U.S. ran a $27.3 billion services trade surplus with China.
  • Multinational Operations: In 2022, U.S.-invested companies in China reported $490.5 billion in sales, far surpassing the $78.6 billion in sales by Chinese companies in the U.S. – a gap of over $400 billion.
  • Global Supply Chains: A significant portion of Chinese exports to the U.S. includes components from the global production network. However, trade statistics are currently calculated based on gross export value, attributing the full value to China. If measured using value-added methods, the U.S. trade deficit with China would be substantially smaller.
  • Declining Proportion: The share of the U.S. goods trade deficit attributed to China fell from 47.5 percent in 2018 to 24.6 percent in 2024, even as the overall U.S. trade deficit hit a record $1.2 trillion in 2024. This, the editorial argues, highlights that the root cause lies in the internal structure of the U.S. economy, not in China’s trade practices.

Source: People’s Daily, June 10, 2025
http://world.people.com.cn/n1/2025/0610/c1002-40497354.html

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Temu and Shein See Sharp Decline in U.S. Sales Amid Tariff Hikes and De Minimis Crackdown

Following Trump’s imposition of higher tariffs on Chinese goods and a crackdown on the “de minimis” loophole, Chinese e-commerce platforms Temu and Shein have seen a sharp decline in popularity in the U.S. market.

The “de minimis” exemption previously allowed tax-free treatment for e-commerce parcels valued under $800. Chinese platforms like Temu and Shein took advantage of it and became the biggest shippers. Now, those goods are subject to a 54 percent tariff and the per-item postal duty was increased to $100 in April and May and $200 starting in June.

Several measures in the U.S. have shown Temu and Shein’s sales declines:

  • Daily Active Users (DAUs): Temu dropped by 52 percent in May compared to March; Shein declined by 25 percent.
  • Monthly Active Users (MAUs): Temu dropped by 30 percent and Shein 12 percent.
  • Rankings in the Apple App Store: Temu fell to the 132nd place from its top-three standing a year prior; Shein slipped to 60th, down from the top ten.
  • Advertising spending in the U.S.: In May, Temu cut its ad budget by 95 percent year-over-year; Shein by 70 percent. In April, Temu reduced their ad budget by 40 percent and Shein 65 percent.

According to CNBC, Temu and Shein have begun adjusting their supply chain strategies, moving away from the “China direct shipping” model – where suppliers ship directly to consumers – to setting up local warehousing and distribution systems in the U.S. However, this shift introduces additional costs and management challenges.

Amidst the high U.S. tariffs, many Chinese platforms are now accelerating to shift to other markets, particularly in Europe. According to HSBC, 90 percent of Temu’s 405 million global monthly active users in Q2 2025 were from outside the U.S., especially from low-income regions such as Latin America.

Source: Epoch Times, June 5, 2025
https://www.epochtimes.com/gb/25/6/5/n14525505.htm

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People’s Daily: Amid U.S. Tariffs, Beijing Pushes for Exporters to Pivot Toward Domestic Chinese Market

People’s Daily reported that, amid the high U.S. tariffs, the Chinese Communist Party (CCP) Politburo (CPC) emphasized the need to accelerate the integration of domestic market and foreign trade at its April 25 meeting. Recently, the General Office of the CCP Central Committee and the General Office of the State Council issued the “Special Action Plan to Boost Consumption,” which proposed the following: “Support foreign trade products in expanding into the domestic market, launch the ‘China Tour of Premium Foreign Trade Products’ campaign, and guide OEM foreign trade enterprises to develop their own brands.”

The Ministry of Commerce launched the “China Tour” campaign in April. By early May it had already generated over 16.7 billion Yuan (US$ 2.3 billion) in intended purchases, attracting more than 2,400 foreign trade enterprises and over 6,500 buyers.

The article listed a few developments:

  • In support of foreign trade companies expanding into the domestic market, 15 major e-commerce platforms quickly responded with a comprehensive package of measures, including direct procurement and supply-demand matchmaking.
  • JD.com announced a special procurement fund and launched a support program to help exporters pivot to the domestic market.
  • Tencent introduced a “zero deposit trial operation” policy across more than 2,600 business categories, allowing merchants to list products without paying a deposit, helping foreign trade firms reduce operating costs.
  • Recently, due to inventory build-up and canceled orders, many foreign trade companies have faced increased financial pressure. In response, Fuzhou City, Fujiang Province is working with financial institutions to defer loan repayments or offer no-principal-renewal loans.

According to statistics, among the hundreds of thousands of Chinese enterprises with export performance in 2024, nearly 85 percent are also engaged in domestic sales, with domestic sales accounting for nearly 75 percent of their total revenue.

Source: People’s Daily, May 16, 2025
https://paper.people.com.cn/rmrb/pc/content/202505/16/content_30073573.html

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China Rejects U.S. Accusations of Violating Geneva Trade Consensus, Says Responsibility Lies with Washington

On June 3, during a regular press briefing at the Ministry of Foreign Affairs, a reporter asked about recent U.S. claims that China had violated the consensus reached during the China-U.S. Geneva economic and trade talks and had taken a series of negative actions.

Foreign Ministry spokesperson Lin Jian responded by stating that the Geneva consensus was established on the principles of mutual respect and equal consultation. He emphasized that China has earnestly and responsibly implemented the agreement. In contrast, the U.S. has, without any factual basis, smeared and accused China, imposed export controls on semiconductors, suspended sales of chip design software to China, and announced visa cancellations for Chinese students – measures he described as extreme and suppressive. These actions, Lin said, have seriously undermined the Geneva consensus and infringed upon China’s legitimate rights and interests. China strongly opposes these measures and has lodged solemn representations with the U.S.

“I want to stress again: pressure and coercion are not the right ways to engage with China. We urge the U.S. to respect the facts, stop spreading false information, correct its wrongdoings, and take concrete steps to uphold the consensus reached by both sides,” Lin said.

In an editorial on the matter, the Global Times stated that despite substantive outcomes from the Geneva trade talks, the U.S. has continued to engage in petty maneuvers, gradually imposing a range of discriminatory restrictions on China. It asked, “Do these actions reflect the spirit of ‘mutual openness, ongoing communication, cooperation, and mutual respect’? Isn’t the so-called ‘slow progress’ entirely caused by the U.S. itself?”

The editorial stated that whether tensions between China and the U.S. continue to escalate depends on whether Washington is willing to work with Beijing and promptly correct its mistaken course. China, it said, has shown sincerity in implementing the consensus and remains resolute in safeguarding its legitimate interests. The U.S. should recognize that pressure and threats are not effective ways to engage with China. It has already “hit a wall” with its past tariff-based blackmail – and if it persists in damaging China’s interests, it will only hit that wall again. China, the editorial emphasized, possesses ample capability and confidence to manage all forms of uncertainty.

Sources:
1. Xinhua, June 3, 2025
http://www.news.cn/world/20250603/e9598d84c4ba474693f4c69b5d89b019/c.html
2. Huanqiu Times, June 2, 2025
https://opinion.huanqiu.com/article/4Mvx0vuC4XE

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Harvard Graduation Speech by Chinese Student Sparks Debate Over CCP Rhetoric and Elite Influence

On May 30, at Harvard University’s commencement ceremony, Chinese graduate student Yurong “Luanna” Jiang (蒋雨融) delivered a speech that sparked controversy for allegedly echoing Chinese Communist Party (CCP) propaganda. The title of her speech was “Our Humanity”, and it included language reminiscent of the CCP’s “Community of Shared Future for Mankind” (人类命运共同体) doctrine. She stated:

  • “Humanity rises and falls as one”
  • “If we still believe in a shared future, let us not forget…”
  • “Our shared humanity…”

Many Chinese netizens viewed her speech and discussed it, since Jiang was the first Chinese student to deliver a commencement address on behalf of Harvard graduates. Her message calling for the inclusion of more international students was seen by some as a veiled response to ongoing tensions between the Trump-era immigration policies and Harvard’s advocacy for international student rights.

Online sleuths also uncovered her background. According to publicly available information from mainland China, Luanna Jiang’s father, Jiang Zhiming, is the Executive Director of the Green Future Technology Development Fund, part of the China Biodiversity Conservation and Green Development Foundation (CBCGDF). The organization is described on its official Weibo account as a national public welfare foundation approved by the State Council, overseen by the Chinese Academy of Sciences, and registered with the Ministry of Civil Affairs, with a mission focused on biodiversity conservation and green development.

Netizens even found that CBCGDF published a report authored by Luanna Jiang’s father, stating that due to the recommendation of Zhou Jinfeng, the Secretary-General and Vice Chairman of the CBCGDF, Harvard University accepted Jiang as a student. Luanna later posted that though she obtained the recommendation letter from Zhou, she didn’t use it – she submitted three other recommendations instead. Then the interesting questions are why did her father author such an article? Also, can a normal person obtain such a recommendation without a well-connected family?

Some netizens pointed out that this is a case where people with power create opportunities for their children, and that Jiang is likely to return to China to some relatively privileged position (due to her family’s power) as it will be hard for someone who majored in ‘International Development’ to find a job in the U.S.

Sources:
1. CReaders.net, May 31, 2025
https://news.creaders.net/us/2025/05/31/2875141.htmlMay 31, 2025
2. Phoenix, May 31, 2025
https://news.ifeng.com/c/8jp9lWrVji3

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Lianhe Zaobao: U.S. Restricts Exports of Chip Design Software and Chemicals to China

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the U.S. Department of Commerce has issued a notice to electronic design automation (EDA) software manufacturers Cadence, Synopsys and Siemens EDA suspending technology supply to China.
It is unclear whether the new U.S. restrictions are intended to create leverage in U.S.-China tariff negotiations, or how extensive the restrictions will be. EDA Software has a wide range of design uses, such as designing high-end processors used by Nvidia and Apple, or designing simple components for power control.

In the meantime, the United States has also suspended the sale of some key chemical products and technologies to China, including butane, ethane, machine tools and aviation equipment. Jet engines were originally sold to the Commercial Aircraft Corporation of China (COMAC). COMAC is developing the C919 large passenger aircraft to compete with Boeing and Airbus. China currently does not have suitable domestically produced engines and must rely on imports. This move was reportedly in response to China’s recent restrictions on the export of key minerals to the United States.

Source: Lianhe Zaobao, May 29, 2025
https://www.zaobao.com.sg/news/world/story20250529-6515396

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China’s Smartphone Exports to U.S. at Lowest Level Since 2011

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, due to the tariff wars, shipments of Apple iPhones and other mobile devices from China to the U.S. fell in April to their lowest level since 2011. Customs data showed smartphone exports to the U.S. tumbled 72 percent in April to just under $700 million, far outstripping a 21 percent drop in China’s overall exports to the U.S. during the same period of time.

In the meantime, according to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), in the first quarter of 2025, the United States imported US$42.572 million mobile phones, a year-over-year increase of 29.8 percent. Among them, 11.669 million were imported from India, a significant year-over-year increase of 181.7 percent. In the first quarter, India’s share of U.S. mobile phone imports increased to 27.4 percent from 12.6 percent in the same period last year.

Apple has been adjusting its supply chain capacity allocation based on expectations of U.S. tariffs. Apple is exporting key components from China to India and then exporting the final products to the United States after reprocessing, in order to reduce tariff losses. According to the statistics of China’s General Administration of Customs, China’s exports of mobile phone parts to India in the first quarter increased by 217.7 percent year-over-year to US$2.75 billion.

Sources:
(1) Lianhe Zaobao, May 20, 2025
https://www.zaobao.com.sg/realtime/world/story20250520-6431026
(2) CCCME, May 12, 2025
https://www.cccme.org.cn/news/details.aspx?id=06CB753EBD7ABD0B04903CE5CF03A586&classid=2ABB150247542E0E&xgid=F868932F64EB7AAF

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Top CCP Advisor Jin Canrong Pushes for “Firm Stance” in Trade Talks with U.S.

Jin Canrong is a Chinese political scientist and expert on U.S. affairs. He is the Vice Dean and Professor at the School of International Studies at Renmin University of China. He has previously provided advice to senior Chinese Communist Party (CCP) leadership and is often referred to as a “national advisor” to the CCP.

Recently, Jin’s recommendations on China-U.S. trade tariff negotiations have been circulating on China’s internet:

“In China-U.S. economic and trade consultations, we must uphold our principles and not make concessions lightly. In this round of tariff negotiations, the U.S. delegation is not being led by Commerce Secretary Lutnick or trade advisor Navarro, but rather by Treasury Secretary Bessent. Bessent represents Wall Street interests, and we must remain highly vigilant. (This implies) that the U.S. has a major goal beyond just selling goods to us – they want us to open our capital markets and allow free capital flows. This is America’s strength, not ours. We must hold the line firmly: only talk tariffs when discussing tariffs, and only talk trade when discussing trade – the capital market is off-limits.

“Furthermore, the U.S. must cancel the tariffs it imposed on small Chinese packages valued under $800. This is a non-negotiable position.

“Additionally, although we mentioned in the joint statement that we would pause or cancel non-tariff countermeasures imposed since April 2, the interpretation, the pause, or cancellation must be on our terms. We have the right to play the ‘rare earth card’ wisely. Our commitment to pause or cancel non-tariff barriers since April 2 can occur simultaneously with strengthened controls over rare earth exports.

“In summary, the China-U.S. tariff war is complex and ever-changing. Although this round of negotiations has yielded substantive progress, the road ahead remains full of challenges and uncertainties.”

Source: Sohu, May 14, 2025
https://www.sohu.com/a/894694877_121287511

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