China Strengthens Position in U.S.–China Trade Dispute Amid Domestic Economic Challenges

China has emerged with increased leverage in its ongoing trade dispute with the United States, following a temporary truce agreed upon by former President TRUMP and President Xi last October. The agreement underscores Beijing's ability to resist economic pressure while maintaining control over critical manufacturing supplies, including rare earth elements essential for consumer electronics and military equipment.

Joerg Wuttke of DGA Group notes the deal could propel China's global manufacturing share from 30% to 40%, signaling a defiant stance to competitors. "They're telling other countries, don't mess with us, don't compete with us, you can't beat us," Wuttke observed.

Despite this external strength, domestic headwinds persist. A prolonged property sector slump has eroded local government finances, triggering falling prices and wage stagnation. IMF chief Kristalina Georgieva recently cautioned Chinese officials about the need for structural reforms during her December visit to Beijing.