Enhancing consumer power helps strengthen China’s initiative in global economic governance
Published: Jun 23, 2024 08:35 PM
China-EU Photo: VCG

China-EU Photo: VCG

On Thursday, China's Ministry of Commerce stated that China might impose provisional anti-dumping duties on pork imports from the EU as part of a year-long anti-dumping investigation that began on June 17. Western media outlets see this move as retaliation for the EU's earlier tariffs on Chinese electric vehicles.

This incident shows that China-EU trade relations are at a crucial juncture, and China's consumer market now holds a significant position in the global economy and trade.

During a crucial period when Western nations are working to reorganize production and supply chains, bolstering China's consumer market has emerged as a vital objective to strengthen China's manufacturing edge and negotiating leverage in global trade.

China is the world's largest pork consumer. Data shows that China's pork imports from the EU have steadily increased in recent years. In 2020, China's pork imports from the EU peaked, accounting for over 50 percent of the EU's total pork exports. Although there was a slight decline in 2021 and 2022, overall import volumes remained at a high level.

In terms of overall value, while pork exports to China are important for the EU, they represent a relatively small proportion of the EU's total exports to China. Data from 2022 shows that China's total imports from the EU were about 230.5 billion euros ($246.5 billion), with pork imports accounting for around 3.3 billion euros ($3.53 billion), less than 2 percent of the total.

Despite the small percentage, pork exports remain crucial for the agricultural and food industries of specific EU countries, such as Spain and Germany. This is because China is one of the world's largest pork consumer markets, and its demand significantly impacts meat export companies and pig farming industries in these countries. China's importance in the global pork market is also reflected in its influence on international pork prices.

Pork is just a microcosm of China's continuously rising consumer power since its reform and opening up. Today, China is the world's most important manufacturing hub and a crucial export market for many countries.

In an era where consumption is paramount, greater import capacity means greater bargaining power in international trade, which is especially important for China as a manufacturing power.

However, when compared to developed countries like the US, the contrast in retail sales of consumer goods is striking. In 2022, the US reported total retail sales amounting to $7.04 trillion. In contrast, China's total retail sales of goods reached 39.58 trillion yuan ($5.88 trillion, converted using that year's exchange rate). While these figures are not directly comparable due to various economic factors, they nonetheless illustrate the significant gap in total consumption and individual purchasing power between the two nations.

As the world's largest consumer market, the US can convert its strong consumer power into global market regulation, giving it significant influence and voice in the global economy, and consolidating its world power.

In the trade war initiated by the Trump Administration, the US' willingness to impose tariffs aggressively is largely due to its strong purchasing power as the largest buyer of Chinese products. The US' efforts to decouple from and sever links with China, forcing many third-country companies to relocate or cut ties with China, stem from its position as the largest buyer.

What Americans buy or don't buy, how much they buy of certain goods, and from which countries they buy, not only significantly impact the global economy but also have important implications for global politics and diplomacy.

Although China is the world's most important trading nation and manufacturing powerhouse, it is not yet the world's most important consumer nation, which often weakens our ability to get into global markets. 

Enhancing our consumer power will help us maintain an advantage in the US and EU restructuring of industrial and supply chains and strengthen our initiative in global economic governance.

If our diverse market can evolve into a vital export hub for an array of products from numerous countries, those aiming to impede Chinese manufacturing advancement will need to ponder the repercussions.