Chinese producers, facing weak demand at home and harsher conditions in the United States, where they sell more than $400 billion worth of goods annually, have no choice but to rush to alternative export markets all at the same time. But no other country comes even close to U.S. consumption power, significantly limiting the production the rest of the world could absorb from its second-largest economy.
This will intensify price wars among Chinese exporters, squeezing their profitability, while also risking further political backlash in the new markets and fanning deflationary forces, if smaller margins result in job losses, wage cuts and reduced investment.
