Deflated expectations: can China stop prices falling?

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• 00:07

  If you were a Chinese policymaker sitting in Beijing last week,

• 00:12

  then this news probably wouldn't have come as a big surprise.

• 00:16

  President Trump's new 10% tariffs on goods coming in from China went into effect.

• 00:22

  Nevertheless,

• 00:23

  there remains uncertainty around how far this latest trade dispute will go and how it will end.

• 00:30

  Eventually we're going to put tariffs on chips.

• 00:33

  We're going to put tariffs on oil and gas.

• 00:36

  That'll happen fairly soon.

• 00:37

  We're going to be putting tariffs on steel and aluminum and ultimately copper.

• 00:42

  But for Xi Jinping and those around him,

• 00:45

  you could argue that a tariff tit for tat is only one of a long list of economic problems for 2025.

• 00:52

  That's because over the past year,

• 00:55

  China has been exhibiting the signs of a much broader economic malaise.

• 01:00

  People and businesses are not spending and the world's second largest economy is struggling to revive demand.

• 01:05

  China still struggling despite recent efforts from the government to boost consumer spending.

• 01:10

  We knew the Chinese economy was not great,

• 01:12

  but it looks like there was a deceleration even as we headed into this last month.

• 01:18

  China's economy has been rocked by a crisis in the property sector after the housing bubble burst in 2021.

• 01:25

  Strict pandemic lockdowns hit consumer confidence, which hasn't recovered since.

• 01:30

  Factories aren't working at full capacity as Chinese exporters face increased barriers to trade with other countries.

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