Chinese investors view US tariffs as a catalyst for accelerating economic restructuring, self-reliance

A majority of Chinese investors who were surveyed view tariffs imposed by the United States as catalysts for domestic economic restructuring despite short-term pressures, according to the results of a recent poll of investor sentiment.

The latest Cheung Kong Investor Sentiment Survey, conducted by the Cheung Kong Graduate School of Business in April amid China-US trade tensions, found that 45.8 percent of respondents believed trade disputes would have positive impacts on China's economy in the long run, compared with 27.5 percent who expected negative consequences. Approximately 20 percent foresaw no material effect.

"While US tariff policies present acute near-term challenges, they may accelerate China's critical economic rebalancing and cement its leadership in strategic tech sectors," said Liu Jing, a professor of accounting and finance at the Cheung Kong Graduate School of Business.

The poll, which was based on the survey of about 2,100 investors, also found that 58.2 percent of respondents identified boosting domestic consumption as a key countermeasure to trade headwinds.

Investors were also doubling down on technological self-reliance and private sector revitalization as strategic responses to China-US trade friction, the survey found.

About 54.4 percent of investors surveyed believe that China holds a leading position around the world in artificial intelligence, up 14.7 percentage points from November 2024, while 55 percent view the nation as a leader in the renewable energy sector, an increase of 19.2 percentage points from April 2021.

"External pressures are forcing Chinese companies to innovate faster and reorient toward high-value sectors," said Liu. "This crisis-driven transformation could solidify China's position in emerging industries like AI and clean energy."

With investors paying increasing attention to private enterprises, the survey also found that 44.5 percent of respondents believe that the status of the private economy is very important for their future investment decisions, a rise of 9.5 percentage points from December 2020. Respondents credited private enterprises' agility in capturing consumer trends and driving tech commercialization.

In addressing how to boost the confidence of private entrepreneurs, 74 percent of the respondents believe that there should be a strengthening of continuity and stability in macroeconomic policies.

While many private entrepreneurs face challenges of external factors in the current round of trade friction, many export enterprises have shifted to boosting domestic sales or exploring new business growth areas with policy support.

Zhejiang Zhongxin Group, an export-oriented packaging company in eastern China, has implemented market adjustments under the current tariff policies.

"In the past, exports accounted for about 98 percent of our business, with our annual sales reaching approximately 1.5 billion yuan ($208 million)," said company director Teng Buxiang. "We previously relied on international trade fairs for expanding client base. Now we're strategically expanding into domestic markets through online platforms.

"Sales in the domestic market through Alibaba's online trading platform 1688 have maintained annual growth of over 50 percent in recent years. Last year's combined online and offline sales exceeded 20 million yuan. We remain committed to maintaining both international and domestic trade channels," Teng added.

Qilong, a toy manufacturer in Shantou, Guangdong province, has begun transitioning production toward intelligent and teen-oriented toys.

Noting that tariff policies have caused inventory backlog, prompting strategic shifts, Qilong factory director Chen Han said, "We're adopting a global market perspective rather than focusing solely on the US market, with particular attention to ASEAN and South American markets."

Emphasizing the competitive advantages of private enterprises, Liu, the professor, said, "The private sector has proved its global competitiveness through agile structures and a culture of innovation, positioning itself to remain an important driver in stimulating domestic consumption in the coming years."