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China Shock 2.0
October 3 , 2024
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- A 100 per cent duty on electric vehicles imposed by the US on imports from China.
- The US tariff hikes also include a 50 per cent duty on solar cells and 25 per cent on steel, aluminium, EV batteries and some minerals.
- China’s surpluses stem from industrial policies aimed at bolstering exports amid weak domestic demand, prompting fears of a potential “China shock 2.0”.
- India’s imports from China grew at a much faster pace than from the rest of the world.
- Goods imports from China surged from $10.87 billion in 2005-06 to $61.71 billion in 2015-16.
- Despite many economic restrictions on Chinese businesses, imports from China surpassed a record $100 billion in 2023-24.
- China’s exports surged significantly in the post Covid period compared with the pre-pandemic period.
- According to IMF calculations, China’s share of global exports increased by 1.5 percentage points
- Bill Clinton, the then US President supported China’s accession to the WTO.
- This led to inexpensive Chinese goods, backed by abundant labour, flooded global markets, resulting in manufacturing job losses internationally.
- Thus, China’s entry into the WTO came to be known as the “China shock”.
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