While the trade war in the United States-China warms up, companies in the main export centers in south-eastern China announce “holidays” in the factory-interrupting production and reduced employees and working hours-while turning to social business platforms to sell stored goods, as they are faced with a sharp decrease in orders abroad.
It is a phenomenon that sweeps away the Chinese provinces focused on exports like Zhejiang, Guangdong and Jiangsu, where manufacturers – have increased by a large backlog of unsold goods – emit a burst of “vacation notices” to announce that they suspend operations in factories.
To eliminate large heaps of inventory, companies now use the sale of export goods from remains via social commercial platforms, such as Tiktok and Taobao, at highly marked prices.
The goods ranging from yoga pants and shoes to household appliances and covers – initially intended to be exported to the United States – are now sold online by Chinese export companies or their employees at negotiation prices, several videos examined by RFA on Douyin, the Chinese version of Tiktok, emission.
The two largest economies in the world have embarked on a growing pricing war that threatens to trade in global and upset the supply chains, while arousing increasing concerns concerning a complete decoupling of American China.
US President Donald Trump imposed 145% rights on imports from China – and up to 245% on certain products. Beijing retaliated with a price of 125% on American products.
Trump took a more conciliatory tone on Thursday, expressing the confidence that Washington and Beijing could conclude an agreement on the prices “in the next three to four weeks”.
This follows the decision of the US administration to exempt certain products, including smartphones and laptops, recently announced tasks.
But in the best export bastions focused on China technology such as the city of Dongguan in the province of Guangdong, Suzhou in Jiangsu, and Jiaxing in Zhejiang, the immediate fallout from the commercial dispute are apparent in factory floors filled with stocks of unandched goods.
Invend goods stocks
In a sprawling warehouse of 20,000 square meters in jiaxing – a city at the prefecture where exports represented 75% of the total commercial volume of 481.84 billion yuan (66.51 billion US dollars) in 2024 – lots of goods originally to be exported.
He noted that products formerly evaluated more than US $ 100 on the American market now find it difficult to sell even at deeply reduced rates of a few dollars.
“The tariff war has caused many goods abroad,” he said.
“Any clothes here can sell for 100 US dollars (in the United States), but now it is sold by tons, and the average price of a room is only a few hundred, and no one buys it … it is impossible to survive.”
Us Footwear Brand Crocs Signature Rubber Clogs – which generally sells $ 30 to $ 70 per pair in the United States – are now discharged for simple sous in China, said the Vlogger.
Crocs has production facilities in China. In February, it provides that Chinese imports will represent approximately 15% of its inventory and that its 1825 financial profits could decrease by around $ 11 million due to price -contrary winds.
But even products that have historically been targeted only for the internal market have not been spared, because the American prices threaten the recovery of the feeling of slow and still fragile consumers of China, supported by a series of recovery measures to stimulate consumption.
Take the case of the traditional Chinese knife brand iconic 400 years Zhang Xiaoquan. Exports represent less than one percent of the annual sales of the company based in Hangzhou, in the Zhejiang, but its knives are sold by tons at the price of a few hundred per knife, said the Vlogger in a video article in Douyin.
Pivot in social trade
Further north in the city of Suzhou de Jiangsu – where the volume of foreign trade reached a record of 2.62 yuan billions (358.9 billion US dollars) in 2024 – A factory pushes its employees to sell its raised online covers, another video published on Douyin by an employee said.
According to the employee of Suzhou Lively Home Textiles Factory who published the video, a factory director managed to sell more than 60 covers by typing his own relatives, friends and acquaintances to whom he made half of these sales.
In the same factory, which mainly produces covers, employees have also been informed that their working hours will be reduced and that only their basic salary would be paid, due to export challenges to the United States
“We are now faced with a trade war, which has assigned our orders … If you have a good job outside, you can leave,” the factory director can be seen by saying nearly 100 employees, in the same video published on Douyin.
While more and more people occur online, electronic commercial companies say they find it difficult to compete with highly updated prices export restrictions of remains sold via social commercial platforms.
“With new prices in the trade war, it is impossible to make a profit. In general, business in all sectors are not good this year,” an electronic commerce entrepreneur in Yangzhou, Jiangsu told RFA.
Like the other businessmen and experts interviewed by RFA, Zhang only provided his first name for security reasons.
Export dependence
The so-called “Troika” of consumption, investment and trade that drives the economic growth of the country has only one left: foreign trade, Chen, a scholar based in Guangdong, told RFA.
“China has little domestic demand because the average income of Chinese represents a too low proportion of GDP, so their consumption capacity is not good. China cannot afford to lose the American market,” he added.
Admittedly, the intensification of the tariff war has testified the “double circulation” strategy of the Chinese president Xi Jinping – which has appointed the internal market of China as the pillar of its economy and underlined a reduction in traditional dependence on growth led by export.
Experts argue that China remains very dependent on the United States, its best export market, to which it exported goods worth $ 438.9 billion in 2024.
“I have been working in the manufacturing industry for over 10 years and I clearly understand the ratio of the Chinese population in manufacturing. This economic situation (now) can be considered unprecedented (and not seen) for decades, “said Chen Xiang, who previously worked as a manager in export factories in” vacation notes “.
A clothing export company in Jiangsu province has published a vacation notice announcing a suspension in production in mid-April until the end of June.
Meanwhile, a manufacturer of electrical devices in the city of Dongguan de Guangdong has announced a closure of one month citing a lack of orders.
The FRG also found that dozens of Zhejiang companies – where exports represented 70% of the province’s gross domestic product in 2024 – had published vacation opinions.
In Zhejiang, more than 50% of its export companies should stop production and take “long vacation”, after the public holidays on May 1.
“It’s like that in Jiangsu, Zhejiang, with even more factories in the Guangdong now.
In 2024, total production of China reached 40.5 billions of yuan (5.65 billions of US dollars). The volume of foreign trade – Exports and imports – was 43.85 Billion of Yuan (6.1 billions of US dollars), whose exports represented 25.45 billions of yuan (3.49 billions of US dollars).
Published by Tenzin Pema and Mat Pennington