China’s economy fundamentally relies on a single engine: foreign trade. The country’s positioning remains that of the world’s factory, a manufacturing hub without its own raw materials or proprietary products. What Beijing has historically sold through its so-called reform and opening policies is a highly controlled, highly skilled labor force.
The Trump administration’s tariff policies have contributed to widespread unemployment among young and middle-aged Chinese workers. Some non-Communist scholars in China have criticized domestic calls to revive the economy through a “consumption-driven” model, arguing that disposable incomes are too low to sustain such a strategy.
Experts note that Trump’s approach, which encourages Americans to continue using fossil fuels while slowing the shift toward renewable energy, is aimed at incentivizing industrial repatriation. But such policies, they warn, could disrupt China’s factory-based model. Already, some 120 million Chinese workers are engaged in so-called “fluid employment,” a cycle that largely consists of short-term jobs alternating with periods of unemployment.
A portion of China’s youth remain influenced by Maoist ideology, viewing the United States as bullying China and believing that foreign-controlled capital is corrupting the Chinese government. Some argue that only a return to Mao-style communism could save the country. Analysts, however, call this a misconception, noting that China has never had the capacity for a self-sustaining domestic economic cycle. They point out that Trump’s trade policies are primarily aimed at protecting America’s traditional oil and manufacturing industries. At the same time, U.S. support for the AI sector is accelerating industrial automation—developments that could benefit the American economy while further challenging China’s factory-driven model.
