Tag: Trade

China’s Playbook for Global Industrial Dominance

Posted on By Nnanda Kizito Sseruwagi

China’s Qinghai Province hosts the world’s largest solar power plant, Gonghe Talatan Solar Park. Experts claim that at full capacity, it can power a country such as Norway. Sprawling across China’s deserts is not just sand but also vast solar and wind projects. Both the world’s largest solar plants and wind farms are all located in China.

China invests an average of $940 billion in clean energy technology per year. In comparison, China invests almost as much in renewable energy as the rest of the world invests in fossil fuels. The benefits of China’s investments will, in the short and long term, not only benefit the country but also fundamentally transform the global economy. We are increasingly entering an era where Chinese domestic policy is effectively global policy.

When Chairman Mao died in 1976, he was succeeded by one of the most transformational leaders of the 20th century, Deng Xiaoping. Upon assuming power, Deng saw the need for profound economic reform through market pragmatism. Under the slogan “Reform and opening up”, Deng began a process of gradual economic liberalisation throughout the 80s. As his reforms took hold in the 90s, China’s economic growth started quintupling, stimulated by surging exports from Chinese factories to foreign markets. China also started testing out the opening up of domestic markets to foreign direct investments through special economic zones.

As recently as 1995, China’s GDP per capita was just over $600, much lower than South Korea’s, which was at more than 12,000 and Japan’s at 44,000.

At the dawn of the 21st Century, China’s rapid economic rise continued to soar under the leadership of Jiang Zemin and Hu Jintao. A defining moment in modern economic history was in 2001, when China joined the World Trade Organisation. It was defining because it opened up access for Chinese goods to global markets. Experts observe that China’s GDP per capita surged by another fivefold in the ten years following its accession to the WTO, and merchandise exports jumped to account for around 60% of GDP by 2007 as a result of the economic liberalisation along international principles.

This was the commencement of an age where more affordable Chinese goods started saturating foreign markets, and China started to build up large trade surpluses with most of the world’s previously leading exporters. By 2010, China had overtaken Japan as the world’s second-largest economy. Nevertheless, China’s export economy remained largely focused on lower-end, labour-intensive manufacturing.

President Xi Jinping came to power in 2012, and three years later, in 2015, announced a new economic strategy: “Made in China 2025.” It was a blueprint for the next stage of China’s economic development. It outlined the weaknesses of China’s economy and set out goals to eliminate them. It said that China’s manufacturing industry was large but not strong, lacked innovation, and was dependent on foreign countries for core technologies and high-end equipment.

The strategy was a clear directive for the state to back key modern industries that had begun emerging in the early 2010s, on which the country’s future as a manufacturing powerhouse depended. These included robotics, aerospace, biotech, electric vehicles, and renewable energy technology.

Is it still surprising that by 2026, China will be the global leader in the clean energy supply chain?

It the recent years, China installs on average 244GW of new solar and wind energy capacity. Chinese green technology companies are the most cost-effective and innovative you can find in the world. Chinese EV brands are rapidly becoming the largest automakers in the world. China accounts for 80% of global solar panel production capacity. It represents 60% of global wind turbine production and up to 90% of global lithium battery production. If there is an industrial race of our time, China is winning it. Chinese technology companies are likely to be competing against themselves in the near future.

It’s not like how Chinese companies became so competitive is a secret for the rest of our countries to borrow a leaf from. The Chinese government provides them with tax incentives and credits to help them grow and operate, and to enable their R&D. Sometimes, it provides them with cheap land and manages the prices of other input costs like electricity. The largest way, perhaps, it supports these companies is by offering cheap loans. However, that is only possible because China has a highly centralised banking sector, with state-owned banks owning 60% of all assets in the sector. This implies they can lend extensively to help favoured industries grow, calculated not by risk and return, but by the government’s own priorities.

Ugandan factories and industries need the same support; unfortunately, most banks in Uganda are commercially owned by multinational capital, whose interest is in profit repatriation, not long-term development of our country. Ugandan companies cannot operate and produce more cheaply without state subsidies and banking support. They need to have lower rent costs, lower tax burden, lower borrowing costs, and subsidised demand in our domestic market.

The writer is a senior research fellow at the Development Watch Center.

China’s FDI Pivot is Uganda’s Road to Real Growth

Posted on By Shemei Ndawula

The Chinese Belt and Road Initiative has defined Africa’s relationship with China for over a decade. Within this time the average Ugandan’s interaction with China was largely limited to the importation of “cheap” Chinese goods and the Entebbe Expressway. The latter has always been an infamous scapegoat in conversations of the fictitious “Debt trap diplomacy” while the former also triggered misgivings with a belief that lower prices construe a compromise on quality.

Fortunately, these narratives have greatly been discredited with the Entebbe Express still standing as one of Ugandas most ambitious infrastructure projects (the detractors of this development always conveniently forget that Mandela National Stadium was also constructed in the early 2000s with a Chinese loan but the debt has never trapped us). Additionally, Chinese imports have switched the moniker of “cheap” for “reliable value for money” and we now have Chinese brands like the Sinotruck that have become synonymous with construction sites in the Kampala metropolitan. This is exactly how Uganda’s relationship with China has been reshaped, with real work, real progress and mutual benefit.

Now China is taking on it’s biggest challenge yet, the shift from infrastructure development to Foreign Direct Investment (FDI) into the Ugandan economy. This does not simply represent a change in policy; it’s restructuring Uganda’s path to development with a focus on building the industrial and processing capacity of the nation.

China’s dialing down on the big loans and ramping up foreign direct investment fast tracks all development because it means Chinese companies are putting their own cash on the line, becoming partners and not just lenders. It’s definitely a pragmatic approach for China; securing resources and markets, but from the Ugandan perspective it’s a breath of fresh air. In the oil and gas sector the China National Oil Company has invested billions of US Dollars into the Kingfisher field, not as a loan but for an equity stake in the project that will define Ugandas economy for at least the next decade.

This is also a large boon for our national GDP because FDI isn’t money that vanishes after a project is wrapped up,  it’s a long term vote in the country’s future. This is evident in the industrial parks being set up, like  Mbale which Chinese investment has turned into a buzzing industrial hub with factories and assembly lines producing clothes, gadgets, cutlery among others. This puts approximately 10,000 Ugandans on payroll, excluding  auxiliary and support industries such as transporters. The slice of manufacturing in our GDP is pushing 27%  and wiyh this strategy we can expect more impressive numbers because we’re not shipping out raw materials anymore but we’re adding value, processing ores, assembling products for the East African market and beyond.

And the best part is this model builds skills that last. In these joint ventures, Ugandans are learning the ropes from high-tech assembly lines to supply chain tricks. It’s helping us adapt to global market turbulence. When coffee prices tank, having a diverse economy with factories humming along is west keeps the lights on. The government only needs to regulate local content policies so that more of the money stays in Uganda.

The reduced debt burden is also not something to complain about, a huge portion of our national budget is already going to debt repayment so China’s new policy could not have come at a better time. This way, China can meet its commitment to invest in renewable energy like solar panel plants and its bamboo research which matters when climate change hits our farmers hard(Uganda is a frontline state in Global Warming effects). With a population as young as ours (over half under 25) this job creation is crucial and foreign direct investment is the most sustainable approach to facilitate this.

As we gear up for talks like FOCAC next year, we need to keep pushing for deals that put us first. China’s shift in strategy to Foreign Direct Investment could be Uganda’s ticket to high-tech sectors, innovation hubs, all fueled by smart partnerships and technology sharing (Rwanda already got a great deal in its e-vehicle manufacturing plant). It matches our drive for self sustainability and solid growth that does not erase what makes us Ugandan.

 

China’s Trade Surplus: A Signal of Economic Resilience and Engineering Stable Global Systems

Posted on By Musiime George

Last year, China registered a $ 1.2 trillion trade surplus the largest in the history of any economy; a scenario that would have made president Trump right in using the favorite phrase “Like nothing anyone has seen before.” Surprisingly, the record surplus came at a time of unprecedented uncertainty and policy hostility that appeared destined to break global supply chains and the global economy. Indeed, last year was the pinnacle of Newman and Farrell’s hypothesis on the “Age of weaponized interdependence.”

With an administration acting more like a rogue state in Washington, Trump II showed no restraint in using control over critical nodes in global economic systems to hold the world at ransom. Meanwhile, despite criticism of China’s surplus as a vulnerability linked to overreliance on Chinese production, there’s more to it than can be heard in mainstream sources. For instance, China’s focus on climate conscious technology; EVs, clean energy, AI products and high tech production systems which are the technologies of the future. In addition, for the global south, the resulting reshoring, and technological leakages mean diversified production sources, an increased role in the global economy and eventually paving the way for a more stable economic system.

The tiny but significant blemish with the argument that China’s trade surplus is a result of over-subsidizing exports to fix slowing domestic consumption is that it overlooks the country’s growing manufacturing capacity over decades. China’s manufacturing sector has not only been transitioning from a low cost, labor intensive model to a more sophisticated one, specializing in new technology and high-end products. In terms of volume for example, China’s manufacturing output had by 2023 reached $4.6 trillion surpassing the next three largest manufacturing economies namely, the US, Japan and Germany. The massive surplus is thus more about the expanding manufacturing capacity than it is about slowing domestic consumption. And whereas global consumption is not about to slow down, shifts towards new technology, and hi-tech production systems are strategies to counter pitfalls on the cost to the consumer side of the equation.

Moreover, the narrative of returning manufacturing jobs to some places also falls flat on its face when examined against China’s current trajectory. A case in point is the pivot from climate conscious technology and energy sources back towards fossil fuels – ‘beautiful coal’ which might as well have cleared the way for the surplus given a substantial portion of it came from Electric Vehicles, batteries and solar panels. Conversely, a focus on high tech production systems means jobs being lost to Chinese people is a thing of the past. Any jobs being lost today will be to technology and the benefit of efficient production systems.

Therefore, what is been framed as salient vulnerability associated with a ‘less visible but still central role’ of China could as well be the beginning of a new dynamic. What we noticed in 2025 was the moving of production processes to new countries in the global south, in a bid to route around the mounting geopolitical pressure. While this has been faulted for its reliance on Chinese intermediate inputs, technology and sometimes expertise, it also means diffusion of jobs, technology and skills to the new economies. Ultimately, this reinforces the production capacity of destination economies in the global south, and provides cushioning against similar shocks in the future. Resilience might be a result of systems stability however; such stability must be engineered by evenly distributing risk across multiple nodes as a safeguard against cascading failure starting in a single dominant node.

The events of the past year and the fallout from a global surge in economic nationalism and protectionism were a warning sign against the implications of concentrating risk in a single dominant hub. The tariff wars by Washington indeed highlighted how vulnerable global supply chains were under the old West-dominated configuration.  Additionally, in the event of the kind of shocks as instigated by the geopolitical strife seen through the tariff wars, the developing parts of the world risked taking the biggest blow. This is why China’s reshoring, and diversification albeit not breaking global dependence on Chinese manufacturing immediately, breaks ground for more stable supply chains in the long run.

However, with globalization on the raise and a more interconnected global system, a strong multilateral foundation becomes ever more important for its emphasis on mutual cooperation. Otherwise, unilateral action towards geostrategic outcomes that chokes a single critical node could jeopardize or even crash the entire system. Obviously, China’s surplus is not a sign of a win in the geopolitical standoff primarily because we are only in the very initial stages of system readjustment.

Moreover, as bellicosity becomes internationalized, targeting gray-area nodes in the supply systems could eliminate the second country of origin option unless any tethering to the parent corporations is severed. We saw this last year with threats of 50% tariffs on nations allied with China and BRICS and more recently a 100% tariff on Canada over trade with China.

In the ultimate end, China’s Trade surplus may not be a direct win in the geo-economic contest but it signals the initial stages of readjustments in the global system. As corporations move operations to other economies, the diffusion of technology, skills, and risk is dispersion that follow provide cushioning against failures of the kind the world was threatened with during the peak of last year’s tariff war. Reshoring and routing against pressure might have produced resilience that resulted into China’s surplus, but in the long term the same could reduce reliance on a single dominant hub enhancing economic stability.

 

George Musiime is a Research Fellow, Development Watch Center.

Inside the China-Canada Trade Deal

Posted on By Nnanda Kizito Sseruwagi

Mark Carney, the Prime Minister of Canada, is currently one of my favorite leaders in the West. His speech at the recently concluded World Economic Forum was a breath of fresh air, rarely breathed from a Western leader. The essence of his message was that “middle powers” should unite against economic coercion by great powers. Profound! Without mincing words, he called out American hegemony, denounced the weaponization of economic integration, and the exploitation of the vulnerabilities of supply chains. Whereas these ideas were not new, they were unanticipated coming from a Western leader. Carney had just visited China between January 13th -17th where he met Chinese leaders including President Xi Jinping, Premier Li Qiang, and Chairman Zhao Leji of the Standing Committee of the National People’s Congress. The last time a Canadian Prime Minister had been to Beijing was nine years ago in 2017.

Carney took opportunity of the visit to commend the exemplary leadership of Xi, noting that the partnership between their two countries “sets us up well for the new world order.” His proposition to the Chinese leader had a list of key items for strategic partnership. Carney sought to partner with China on energy, finance, agriculture, security, and multilateralism.

China is a major trade partner of Canada. It consumes $30 billion worth of Canadian exports annually. This translates into 400,000 jobs for Canadians. The relations between the two countries had been strained in the past. The former Prime Minister Justin Trudeau had brushed China the wrong way on a number of occasions, including such incidents as the arrest of the Huawei executive, Meng Wanzhou, in 2018. These are the scratches that Carney now meant to mend.

Prime Minister Carney has a clear understanding of the world his country finds itself in today. Unlike most Western leaders, he seems undeluded by prejudices about China which are centered on the ideological disparities between the East and West. His narrative has been consistent about highlighting the fact that the world has changed, and China is now a key partner in setting up Canada for the new world order.

Unlike the USA, China has a stable political leadership under the Chinese Communist Party, which has been in power since 1949 and is consistent about its principles, both domestically and abroad. Carney understands, and notes that China offers a more predictable relationship with Canada as opposed to Donald Trump’s America. With China, what you see is what you get.

Canada has not had an easy time with its historical partner, USA, ever since Trump started his second term. Upon coming to office, Trump imposed tariffs on Canada’s key sectors like metals and automotives. He then moved to arbitrarily end a longstanding North American free trade agreement between Canada, the US and Mexico.

While Trump is rendering America’s trade agreements with Canada irrelevant and their future uncertain, China is moving to drastically reduce tariffs on Canadian goods, such as canola seed from 84% to around 15% by the beginning of March. It is also removing tariffs on Canadian lobsters, crabs and peas. On the other hand, Canada is also removing tariffs from Chinese electric vehicles (EVs) from 100% to 6.1% for the first 49,000 vehicles imported each year. Carney also promised that this quota could rise up to 70,000 in half a decade. This is a significant step for China, which is the world’s largest producer of EVs, accounting for 70% of global production.

It is obvious what these developments spell for the US, politically and economically. Whereas Trump had initially been indifferent towards the recalibration of the Canada-China relationship by Carney, in the wake of signing these trade deals, he has stood up and threatened to hit Canada with 100% levies on all goods and products going to the USA. This only confirms the case Carney has been making about the weaponization of economic integration by the US and the need for middle powers to rise up against the hegemonic coercion they suffer from big powers. But it is latently clear to Carney that in order to build a stronger Canadian economy, he needs to diversify his trade partnerships throughout the world, and escape the hostage of Trump’s America.

With America threatening a trade war against multiple allies, Carney is spot on about the risks involved in relying highly on USA a s a trade and security partner. Renewing and improving the China-Canada relationship is therefore important in guarding against unforeseen reactions from an unhinged Trump administration.

Carney understands well that largely due to American hegemony, the rules-based world order is fading and the era of great power rivalry is here. The rules-based order was celebrated for its principles and predictability, neither of which can be spoken about today. It is a fiction that lost its power of collective faith, and now the world comes to a rupture from that order, instead of a transition.

The writer is a senior research fellow, Development Watch Center.

 

On Keir Starmer’s Visit to China

Posted on By Nnanda Kizito Sseruwagi

It had been almost eight years since a British Prime Minister had last set foot in Beijing. Keir Starmer’s January 28 visit to China is therefore a pivotal moment that signals a recalibration of UK-China relations, in particular, and British foreign policy generally, especially given the current paradigm shifts Western nations are making in the face of an increasingly fragmented global order. It has now become obvious to middle powers that, in the post-Cold War era, their economic and security concerns may not be permanently and reliably abdicated to the American leadership.

To understand the objective of Starmer’s trip, let’s look at the composition of his delegation to Beijing. Among his nearly 60-member entourage were cultural representatives and business executives from some of Britain’s major corporations, such as HSBC (a British universal bank and financial services group), AstraZeneca (a British-Swedish multinational pharmaceutical and biotechnology company), and Airbus (a European aerospace corporation). Both the entourage and the timing of the visit speak to economic engagement as Starmer’s primary objective at a time when the Labour government he leads is struggling at home to deliver on its economic growth promises. Whereas there is a trade deficit between the UK’s trade with China – the UK, having long-ceased to be the world’s workshop – in the services sector, the UK enjoys a surplus. This implies that there is a demand in the Chinese market for British services if Britain could leverage its expertise in finance, consulting, and professional services.

However, it is not just economic interests at the table for this visit. The past few years and even months have been frosty in the bilateral relations of the two nations. In the past, there were concerns in the UK over allegations of Chinese espionage. The UK also raised queries on claims that China was supporting Russia in the Ukrainian conflict. And of course, in typical Western fashion, the UK has always contested the way China governs in Hong Kong, claiming there is a crackdown on civil liberties. Two months before Keir Starmer’s visit, Jimmy Lai, a British citizen, had also been a subject of conflict between the two states following his conviction under Hong Kong’s national security law. As such, whereas Starmer may pragmatically focus on prioritising economic opportunities for Britain, the issue of human rights will linger in the background.

In order to show a spirit of good faith, which is key in improving relations, Starmer also approved the construction of a mega Chinese embassy in London ahead of his trip, which is one of the trade-offs taken to reset diplomatic relations between the two countries. This is a good move since, in any negotiation, each party needs to make concessions to build trust.

Keir Starmer’s government has articulated its approach to UK-China relations as characterised by a comprehensive and consistent strategy. This strategy is defined by the compartmentalisation of various aspects of the two countries’ relations in order to separate economic cooperation from the often sticky, contentious political concerns. Nevertheless, it is plausibly expected that there will be domestic opposition in the UK over the traditional points of suspicion and accusations regarding human rights violations, espionage, and related concerns, which other political parties in the UK will exploit to undermine the achievements Starmer’s Labour party is trying to realise.

If we take a broader vantage point of the developments in the global geopolitical arena, we find that Starmer’s context is shared by multiple Western leaders who have recently sought to improve relations with China and proactively reconfigure their ties with Beijing. Among the recent guests in the red dragon’s courtyard were French President Emmanuel Macron, Australian Prime Minister Anthony Albanese, and Canadian Prime Minister Mark Carney. Clearly, middle powers have established a pattern of hedging their bets with China in the midst of increasing unpredictability and uncertainty about the next move from Trump’s America. China is a much more “what you see is what you get”, stable, reliable trade partner that any country can aspire to have now. There is no need to pay the cost of navigating America’s tariff-punctuated, transactional economic terrain.

The American-dominated world order has been rapidly turning into a system of unilateralism and protection. It is China that has lit the way in championing multilateralism. With World leaders such as Irish Prime Minister Michael Martin, South Korean President Lee Jae Myung, and Finnish Prime Minister Petteri Orpo successively paying homage to China since this year began, China has demonstrated its indispensability as a resourceful global economic stability partner. It was therefore not surprising that this would spike tensions with the United States.

With Starmer’s visit, the UK has made a profound diplomatic statement in Beijing. Every country now has to engage China. Isolation would be costly. China is not to be ignored or contained but partnered with. Starmer has acknowledged without stammering that “like it or not, China matters for the UK!” This reflects a pragmatic appreciation of the dynamics of economic interdependence as constituting both vulnerabilities and opportunities that must be carefully negotiated.

Nnanda is a Senior Research Fellow, Development Watch Center.

Zero Tariffs: How China Quietly Rewriting Africa’s Trade Future

Posted on By Musanjufu Benjamin Kavubu

At a time when trade wars are raging across the world, something remarkable happened. China opened up its market to Africa fully, as it had promised during FOCAC 9 in September 2024. This write-up will have characteristics of great power contestation concerning the African continent, but it’s not a blind hip of praise for Beijing. It’s a fact that China has not in the past treated Africa with an imperial hand, unlike its counterparts in the West, especially Washington, that only deals with Africa on vertical level.

Present Trump 2.o has decided commercial diplomacy will shape his foreign policy, and Tariffs are at the forefront of his arsenal as the United States deals with the rest of the world especially Africa. Even when Washington established the famous African Growth and Opportunity Act (AGOA) in 2000 to give African economies duty free access, at the end of the day countries that didn’t obey US orders were kicked out. The orders are normally political conditions such as human rights records that are hypocritical, after all they set up their country after genocides against native Americans.

China’s policy to grant African countries duty free access was not an overnight decision, it has been decades in the making, based on pragmatic dialogue between the two sides. It all started back in the Forum on China Africa Cooperation (FOCAC) Ministerial conference in Addis Ababa in the December of 2003 when zero Tariff were introduced on selected African exports to China from 30 countries, and by 2018 the number increased to 33.

In September of 2024 the 33 countries were formally granted zero tariff treatment to all their experts to China beyond the selected goods from the past, and this took effect in the following December. Through further dialogues most notably the most recent FOCAC followup ministerial meeting held in Changsha in June of 2025, it was announced that all goods from the 33 African countries, and an additional 20 that have diplomatic relations with Beijing would be eligible for 100% duty free access to the world’s second largest economy.

At the moment all African countries except Eswatini that recognizes Taiwan as a country, have a duty free access to the Chinese market. Eswatini’s diplomatic stance does not make sense because even the United States doesn’t recognize Taiwan in that capacity. As Africa was still figuring out the African Continental Free Trade Area (AfCFTA) nothing is going to boost the continent’s main trade vehicle like the Chinese gesture for trade and corporation.

Today China has the second largest economy on the planet with a population of about 1.4 billion people, it has a middle class of over 400 million people, this middle class is still growing and it has the characteristics of other middle classes world over, it desires high quality products of all sorts. This opens several opportunities for the African continent, for example through AfCFTA, to meet Chinese demand for beauty products by African start ups in that sector across the continent will require collaboration, and coordinated efforts to make it into the Chinese market for starters. It’s going to take enhanced regional supply chains that will require regional hubs to facilitate the logistics before they hit the ports to head out for China.

For the youth on the African continent to make into sectors like fashion on the Chinese market, they have to scale up production jointly across the continent, improve economies of scale and export competitiveness are some of the areas that African women making designer clothes that meet the Chinese standards will have to take on from time to time to survive. Automatically to meet the Chinese demand African governments have to make sure there are policies in place to foster intra-Africa trade as industrial diversification will be vital.

On July 15th 2025 as Trump was proposing to impose 10%+ Tariffs on the global South, Beijing gave every African a chance to experience this remarkable natural trade evolution between China Africa Corporation, it’s not imperialistic, it’s coherent and inclusive. The question now, is how does each African from an individual level especially the educated youth benefit from having access to 400 million people with enough disposable income and consuming everything at the moment from goods like coffee, and shea butter, to services like art and music? Most African governments know exactly what they will be exporting to China, but it’s important that the individuals also position themselves to benefit from the duty free access.

To get an African product to the Chinese market there must be agents involved, its not a usual opportunity for Africa to be at the up stream of a supply chain as goods get exported to China. To meet the quality standard, more jobs will be created in agriculture, at rural industrial hubs, and in mining. Even in fashion their will be some form of machinery operations. To facilitate logistics, transport is an endless expanse. The best informed will take up the space of export consultancy. To penetrate the Chinese market, online platforms and E commerce are a must.

A few policies at state level must be put in place across the African continent under the watch of the African Union and it’s 2063 agenda the backbone of the AfCFTA, but also individuals like you and me must be ready to take up the opportunities that will be present to benefit from Africa’s zero Tariff access to the world’s largest population.

The author is a research fellow at the Centre for BRICS Studies, Uganda.  

 

 

China’s First Quarter Economic Performance Vindicates Beijing’s Approach to Tump Tariffs

Posted on By Joshua Kingdom

China’s National Bureau of Statistics (NBS) has finally released the much anticipated data on the performance of the country’s economy for last month. Ordinarily, the results should not be a big deal as China has been rather consistent for sometime now. In this case however, everyone was looking to see how things turn up because the United States President had made it an absolute priority to frustrate Beijing during the beginning months of his term. What the said statistics have shown however, is a picture far distant from this vision.

NBS’ monitoring tracked all the indicators of growth and one after another, they revealed a country that is only going strong. Figures for the year-on-year industrial production, fixed-asset investment, retail sales, and consumption increased by 6.7%, 4.2%, 6.1%, and 5.1% respectively. For the case of imports and exports, growth capped at 8% while urban unemployment declined by 5.2% and inflation remained stable at 2.5%.

Since numbers do not lie, one can confidently say that this turn of events may well be the first vindication for the measures that the Chinese Administration adopted in the wake of Washington’s offensive. The latter party might have won on rhetoric but as it turns out, strategy and foresight seem to have prevailed after all.

We remember succinctly for instance, that while warning that trade wars do not benefit anyone, President Xi took to measures such as export tax rebates, providing financial support for Chinese export companies, as well as solidifying domestic production in the face of an adamant adversary.

With Trump’s government already making concessions as substantial as the recent tariff talks in Geneva then, the NBS statistics can be seen as just one of the many hard facts that are starting to give China the edge in the new international economic dispensation. Financial institutions such as Goldman Sachs are one other example of these projections (and, they are as conservative as you can get on this issue). Morgan Stanley economists have thus gone back on their word regarding how much supplementary package China will need by the fourth quarter. They have lowered their initial estimate ($280) by more than half.

Naturally, this leads to the “what next” question. For China, there is no doubt that it will thrive following the outcomes in Geneva as it had done so even prior. The main strength that she carries here though, is that she comes to the table on her terms i.e. its economic policy will mostly proceed as the Communist Party of China (CPC) intends it to. That way, the would be uncertainty will be corrected for as the different domestic players do not have to overly rely on the mercies of what the US decides to do– which as history has shown, is not a good way to formulate policy.

But other China is hedging itself too. For this case, the CPC has introduced special treasury bonds looking to increase government expenditure and help support vital projects. $140 billion has already been injected in the process. Cao Yuanzheng of China Economic 50 Forum has pointed out that within three months (which is not far off in the future), the impact of the bonds will have begun to be felt.

Given this combination, it is expected that China’s economy will grow by an impressive 5.1% which is approximately the size of the entire Switzerland during the second quarter of the year. For context, the Swiss operate the 20th largest economy world over so it is serious expansion that we are talking about. Add to that the fact that China has had to endure times as difficult as it has and you can bet that whichever eventuality comes after the ninety days settlement with Washington, the Asian economic powerhouse will be even better positioned.

In terms of the global picture, it is anticipated that China’s contribution towards general economic development will reach a high of 35% at the end of the year which is again a testament to the country’s dynamism. This too is an improvement of 5% from what it was last year.

Looking back, it was always clear that President Trump’s approach to China was mistaken. Projections are one thing however, and reality another. Now that China’s performance aligns with the predictions however, there is a much stronger case for Xi Jinping and his team.

The writer is a research fellow at the Development Watch Centre

Trump’s Tariffs: As China Retaliates, The World Has Refused To Bend The Knee

Posted on By Alan Collins Mpewo

Trump’s first weeks in office for his administration’s second term have not been short of interesting news. To his critics he has proved right, and to the U.S allies, he has shocked them. In fact jokes have been filling media platforms, of the tariffs that were slapped on almost the entire world. His administration has recently imposed tariffs on countries’ products entering the U.S market, that it all seems like the U.S has been having it that bad to reckon. To make America great again – either you bend towards our interests or you will be purged. China might be the greatest victim of the levied tariffs. Trump in his first term as U.S president imposed tariffs of over 20% on select Chinese products into the U.S, tariffs that were maintained by the Biden administration. From January to April 2025, the US trade-weighted average tariff rose from 2% to an estimated 24%, the highest level in over a century. Trump escalated an ongoing trade war with China, raising baseline tariffs on Chinese imports to an effective 145% after April 9, 2025.

Explaining that “the US’s imposition of abnormally high tariffs on China seriously violates international trade rules, basic economic laws and common sense,” China reciprocated announcing it was raising tariffs on all United States goods to 125 percent.

The global south countries have been no exception, with a few mentions such as Zambia, Lesotho, Zimbabwe, Mauritius, South Africa, Kenya, and many more. The intention according to the White House media outlets have been to level ground where USA was facing unfair trading terms. The state of affairs led shortly to panic especially in the stocks markets and as noted by numerous economists, JP Morgan Chase warned of possible likelihood of steep recession. But it was all resolute of the Trump administration that be damned, dear world, we are taking back what is ‘rightly’ ours. Long term allies affected. Alliances broken. Panic caused. All in a bid to not only cause alarm and show strategic strength, but to push the countries on whom tariffs were imposed into negotiations, bending the knee towards the U.S, and put the rest on notice of what might happen in future should they not adhere to the U.S terms as they come.

Many years and efforts of diplomacy put to a drain. Diplomacy is expensive. World histories are littered with case examples. But one event can change the course. The European Union had learnt so for decades, and now with a new blow, it still learns of the inadequacies presented from its leniency to U.S supremacy. The results? Now the E.U is realigning its interests. Strange times. China’s reaction does not come off as shocking. Neither does the imposition of stiff tariffs on its products. China equally issued fitting tariffs on US products entering the China market and a limit to access of some rare earth materials, with U.S and Ukraine’s rare earth deal gaining disruptions on possibilities of success. The Canadian Premier also responded in equal measure as the U.S did. And by day, the list of those imposing similar or worse tariffs keeps growing.

In an official response, China stated (among others) in a communique, “by taking such action, the United States defies the fundamental laws of economics and market principles, disregards the balanced outcomes achieved through multilateral trade negotiations,… and weaponizes tariffs to exert maximum pressure for selfish interests – a typical act of unilateralism, protectionism and economic bullying. Under the guise of “reciprocity” and “fairness,” the US is playing a zero-sum game to pursue in essence “America First” and “American exceptionalism.” It attempts to exploit tariffs to subvert the existing international economic and trade order, put U.S. interests above the common good of the international community, and advance U.S. hegemonic ambitions at the cost of the legitimate interests of all countries.” Spot on, because as the communique rightly noted, the World Trade Organisation approach to international trading with a rules based trade system was introduced to ensure balanced economic benefits for all world players. Fair trading and not economic bullying.

But the world has refused to bend the knee. For the global south, with incidents like the suspension of many African countries from AGOA, Uganda inclusive, has opened doors to new diplomacy and alliances. It goes without surprise as to why most countries in the global south are turning their choice of partnership to the East. To them, the US is no longer to be regarded as the decision making commander on all world affairs, or the compass that determines how affairs should run in each country. The window keeps getting opened to new allies, differently this time round, with allies that have some fabric of respect to autonomy and independence in determining internal politics and affairs – a lacking factor with U.S alliance. With the growing tensions, the U.S days off reaping off heaven are reducing. This was made strategically with its withdraw from global commitments under the World Health Organization, International Criminal Court, and other United Nations parastatals.

The defiance has grown, dissent increased, and realities are clearer. To re-echo Kissinger’s quote, “To be an enemy of the U.S is dangerous. But to be a friend of the U.S is fatal.” A country that has run its foreign relations in such ways is not one to keep close. The allies have until this year opened their eyes wider. For Africa, it has been a point of sheer exploitation. From rumored regime change covert missions, to looting of minerals, and a growing lack of boundaries on the extent of meddling by Western powers, the ascension of the East – specifically China – as a parallel competing economy has been a blessing to the global south with alternative implementation of foreign policy and respect of autonomy. A growing admiration of opposition from an ally showcasing the possibilities that lie in concerted neglect of unfair global dominance. What is certain is that the global south will survive and whereas the economic disruptions will cause discomfort, more power lies ahead in turning away from full alliance with the U.S. All thankfully to Trump’s administration.

Alan Collins Mpewo, Senior Research Fellow, Development Watch Centre.

China Town and the Ugandan Economy: A Debate on Growth and Consumer Choices

Posted on By Nnanda Kizito Sseruwagi

One of the most difficult yet overly simplified ideas in economics is the economic growth of nations. Economists and pundits seem to always analyse by analogy, connecting dots backwards to define unique or even random experiences of developed nations and claiming that they developed because of certain economic policies they pursued.  The truth is that we know very little to certainly tell what or how countries achieve economic growth. Often, developed countries experience booms and bursts, or even the periods under which their economies experienced fast growth are always disparately distributed, with different characteristics and sometimes similar characteristics that never guarantee growth.

China is a good example to illustrate this point. It is a country famous for pursuing socialism, yet today, there is argaubly growing worry that China, a socialist country, is fundamentally restructuring the capitalist world in ways never before imagined. How is a communist country now being accused of hyper-capitalism? Isn’t this a big irony?

Back to China Town in Uganda; a hypermarket that opened in September and saw an overflow of customers who flocked to it in droves, driving the police to close it down for some time because of the security threat from the mob of buyers that had crowded the parking space at its Lugogo location.

Some critics have expressed fear and warned that China Town spells doom to local entrepreneurs in downtown Kampala who are losing business opportunities because all customers are now flocking to the China store to buy goods at astronomically low prices.

Some have observed it as the newest trend highlighting an already existing, broader issue of global capitalism, where multinational corporations undermine local economies.

I would not interpret or understand China Town as comparable to Western multinational capital at the helm of global capitalism because I see human agency both from Africans/Ugandans and Chinese traders to enter a mutually beneficial trade relationship. This is different from the state-centric phenomenon that exploitative multinational corporations often come with. I think this is also related to the common misinterpretation of all ‘‘Chinese’’ activities under the umbrella of ‘‘China.’’ For instance, industrial parks in Uganda established by the government are usually mistaken for Chinese enterprises because they are constructed with the support of the Chinese. But there is a difference between “made in China” and “made by Chinese.” The point is to have domestic industries, and what makes them domestic is that they serve the interests of the nationals, are run by nationals, and the value of the products is domestically harvested. Even if there are Chinese advisers in the industrial parks, it would not make them Chinese industries.

The question to answer about the China Town phenomenon is: Whom does the China Town business serve?

Droves of customers flock to the supermarket because they are voting with their feet and wallets and are saying, “This serves our interest!”

True, many traders in Kikuubo and Kamapala road may be losing business to China Town, but they are also selling foreign goods, imported at the cost of depleting our country’s foreign exchange reserves. The only debate they can have is as regards customer satisfaction, and it seems customers are not satisfied with paying expensively for “fake” products from Ugandan traders, yet they can buy similar products at half the price in China Town.

I would have argued differently if the fake products sold by Ugandan traders were Ugandan goods because then I would have the understanding that we need to support Indigenous innovation and support domestic manufacturing if it is to improve over the years and give us better products while also growing the size of our economy through manufacturing. But this is not the case.

Local traders in Kikuubo, as President Museveni has emphasized to them often, are simply Ugandans who promote foreigners to leach on Uganda because they are very content with investing their money in importing instead of supporting local manufacturing.

The alternative viewpoint I have on China Town is that it might actually be the engine that supports the growth of the Ugandan Economy in some ways.

How?

By providing Ugandans with affordable high-end goods such as electronics, stationery, and other items needed to perform work more effectively, China Town is likely to greatly improve the productivity of workers by availing them tools to efficiently work and increase output.

This cannot be said of expensive shops in Kampala which many Ugandans cannot afford to buy from to improve their work efficiency and general living conditions, yet they are also importers of foreign goods.

In conclusion, I am not claiming certainty of knowledge as far as predicting what the transformative factors for Uganda’s economy will be. But in analysis, local traders have no locus standi to accuse China Town of affecting the economy. The economy is built by Ugandans who go about their work, and they need tools to work. What is wrong with them buying those tools quite cheaply from a China Town supermarket?

The writer is a senior research fellow at the Development Watch Center.

Trump’s Trade Tariffs: Evidence of American Aggression and Unreliability

Posted on By Allawi Ssemanda

In what many described as not surprising but still shocking, on Monday 10th February, the President of the United States of America (U.S), Donald J. Trump announced that Washington was slapping 25% tariffs on all aluminium and steel imports accessing the U.S market.

Speaking from White House where he made the announcement, Trump reasoned these tariffs are meant to reshape international trade. Without facts, America’s whining “tariff man” claimed global trade is unfair to the U.S and American workers. He proclaimed that his unorthodox use of tariffs was “the greatest thing ever invented” as he boasted calling it “the beginning of making America rich again.”

Despite stressing that these tariffs will apply to “all countries with no exemptions, no exceptions,” scholars and analysts contend that Trump’s 25% tariffs will largely affect Washington’s immediate neighbours like Mexico and Canada. The American Iron and Steel Institute lists Canada, Brazil, Mexico and South Korea as America’s major sources of steel and aluminium products.

Canada and Mexico, both America’s closest neighbours and trading allies are already under Trump’s pressure with the leaders of the two countries having agreed with Trump to pause his 25% tariffs levy on Canada and Mexico for 30 days after last minutes negotiations with “tariff man.”

For China, her products entering into the U.S are already facing a 10% levy announced by Trump on February 10th. Beijing has since then reciprocated with a similar percentage levy onto U.S exports into China. Trump is already threatening with a round of reciprocal tariffs. Such reciprocal tariffs would follow 25% levys Trump announced on aluminum and steel products and his additional 10% levy on Chinese goods. Despite criticism by several analysts, Trump insists “the long-term it’s going to make our country a fortune.”

While Trump is describing his use of tariffs against other countries as “the greatest thing ever invented,” and calling it “the beginning of making America rich again,” if critically analysed, his tariffs are not only likely to create negative impacts to targeted countries but will equally hurt the American Economy.

This week’s Statisticts from The U.S Bureau of Labor Statisticts shows that wholesale prices in the U.S have already jumped by 3.5% while consumer prices rose by 3%! Projections for U.S economy bears no good news. Ernst and Young’s chief economist, Greg Daco contends that in 2025 alone, America’s Growth Domestic Product (GDP) is likely to contract by 1.5% and 2.1% in 2026 with inflation rising by about 0.7%.  A deep analysis of this gambling method means that in a typical Donald Trump style – projecting toughness and being wise, “tariff-man’s” use of  tariffs as many analysts argue is an own goal and recipe for slowing America’s economy and will increase inflation which will hurt the very people Trump claims wants to save by forcing companies to work in the U.S and create jobs as a way of dodging his tariffs.

While Trump claims tariffs are meant to safeguard the U.S from the so-called  drugs, illegal immigrants as he noted for the case of Mexico and Canada, and ending what he called unfair trade with China, analysing Trump’s speeches and remarks on these tariffs makes one thing clear. President Trump is an Isolationist who thinks the U.S can be a perfect closed economy. Of course, this is far from reality.  For example, while announcing 25% now paused tariffs on Canada and Mexico, Trump was categorical telling Americans “we don’t need the products they have. We have all the oil you need. We have all the trees you need, meaning the lumber.”

It is not surprising that the Wall Street Journal’s (WSJ) 31st January 2025 editorial entitled “The Dumbest Trade War in History” argued that Trump’s tariffs are “for no good reason” and that all reasons advanced by Trump “make no sense.”

From multinationalism perspective, weaponizing trade at a time when the world is faced with economic recovery challenges partly caused by the Covid19 pandemic, and aware that free trade and uninterrupted global chain supply is key for the world to realise United Nations’ agenda 2030, one can conclude that under President Trump, the U.S is now openly selfish and cannot be relied on as a responsible member of global community.

A sign that reads ‘Buy Canadian Instead’ is displayed on top of bottles at a B.C. Liquor Store, in Vancouver, on Feb. 2.Chris Helgren/Reuters

Whereas Trump maybe boasting with his dumbest trade war hopping to reshape global trade on his terms, the scars will not be felt by targeted countries alone but also his voters who as of now Trump seems not to care much about. They already voted for him and he will not be seeking another term. Again, with his 23rd Jan. 2016 “I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose any voters, OK?”, Trump knows his suppoters are fanatics who can simply sell lies and blame another country say China and accuse it for their suffering should his trade war effects be devastating to American final consumers as many analysts predict!

While for geopolitical reasons some war hawkers in Washington may argue that Trump’s tariffs will slow China’s economic growth, at the end, the U.S will lose more than China.  It is important to note while his rhetoric is more against China, Trump is also targeting America’s closest neigbours and trading partners like Canada and Mexico. The message from this is clear. As Bernard Lewis taught us, “it’s risky to be America’s enemy, but it can be fatal to be its friend.” With this, geopolitically, while the U.S is always driven by Washington’s libido dominad – a latin phrase for the desire to dominate others, with Trump’s tariffs targeting “all countries with no exemptions, no exceptions,” the beginning of the end of America’s hegemony is closer than ever. It is now clear than ever before that what matters to Washington is not how close you’re to them. It is not their so-called “our shared values, good governance or human rights or democracy” as they normally claim. It is simply America’s interests that takes  precedence. This idea can best be understood from the words of U.S’ founding father, George Washington who in his 1976 farewell speech observed that; “No nation is to be trusted farther than it is bound by interest; and no prudent statesman or politician will venture to depart from it…unless both [nations’] interests happen to be assimilated.” 

 The writer is a senior research fellow at the Development Watch Centre.