The incoming administration in the United States is expected to intensify export controls on China and strengthen measures to block overseas markets for Chinese technology products. However, Donald Trump’s new team, steered by his pragmatic approach, may ease the pressure in some sectors.

The two major powers should go beyond their differences and work together to advance global industry and offer even greater joint contributions — finding new ways to secure a peaceful, mutually beneficial relationship.

Trump's proposed tariffs on Chinese imports serve his nationalist base but ultimately act as a deceptive "shell game," shifting costs to American consumers and producers. While some industries may benefit short-term, the broader economy and middle-class Americans will ultimately bear the long-term consequences.

China's leadership has acknowledged the need to prioritize consumption and foster entrepreneurship, but these goals require deeper systemic reforms and a bolder embrace of risk-taking to reignite growth and confidence in the economy.

China’s GDP growth slowed during the first three quarters of 2024, from 5.3% to 4.7% to 4.6%, raising fears that the country would not achieve its annual growth target of around 5%. But the latest data suggest that China’s economy is finally turning the corner.

The business model that underpinned Chinese economic growth for over two decades has collapsed in recent years, especially since the outbreak of the COVID-19 pandemic. Now, the combination of rising uncertainty and falling confidence is casting a dark shadow over the Chinese economy.

The Chinese stock market has rallied recently in anticipation of another round of government stimulus. This is understandable, as the authorities have rolled out multiple monetary and fiscal stimulus packages to stave off deflation and boost GDP growth. But with public debt already well above historical norms, there is limited room for further fiscal intervention without risking a future debt crisis.

With the country at a critical economic crossroads, the Chinese government’s carefully calibrated policy adjustments provide a solid foundation for future growth. The economy is expected to gain strength, as domestic development and global confidence are both addressed through clear-eyed assessments of deep-seated challenges.

Beijing has put the United States on notice that China will fight to safeguard its interests. Like a giant panda, which will attack someone who pokes it in the eye, China retaliated swiftly after the Biden administration tightened the screws on technology exports. Donald Trump, who has threatened a new trade war, should take careful note.

China’s engineering prowess has been nothing short of extraordinary. From world-class infrastructure and eco-friendly cities to space systems and high-speed trains, China’s impressive accumulation of state-of-the-art physical capital has played a dominant role in driving its economy. But China’s physical engineering accomplishments on the supply side have not been transferable to social engineering efforts on the demand side, especially in stimulating consumer demand.