The Western meme about Chinese“overcapacity” doesn't play well in the Global South, where demand for Chinese telecom infrastructure, low-cost EVs, solar panels and steel is growing. Despite some minor frictions with developing-market customers, for example, Brazil's steel industry, China has found an expanding market in the Global South.

China's exports to developed markets peaked during the Covid boom due to a surge in demand for household electronics, but have settled back to the level of 2018-2019.

China's direct exports to the United States, though, tell only part of the story. After the Trump Administration imposed a special 25% tariff on about US$200 billion of Chinese imports, Chinese manufacturers re-routed supply chains through third countries in the Global South, for example, Vietnam.

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A modest recovery in home sales and higher spending on household appliances and cars, meanwhile, point to a limited improvement in consumer demand. China continues to face economic headwinds due to the property market slump, but a moderate growth rate in the range of the government's 5% target for this year seems achievable.

Last week, the International Monetary Fund upgraded its 2024 growth forecast for China to 5% from 4.6%.

Follow David P Goldman on X at @davidpgoldman

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