https://www.counterpunch.org/2025/04/30/china-navigates-a-world-of-uncertainty/
China Navigates a World of Uncertainty
Photo by Li Yang
A jarring contrast defines the present global landscape. While the IMF forecasts a multiyear drag on growth due to the current tariff wars—and markets eye the United States with crisis-era caution—Beijing is proclaiming an era of regional stability. This divergence isn’t just a matter of differing perspectives. It highlights a fundamental tension in the global landscape, a chasm between the perceived realities of economic policy-making and the aspirational rhetoric of geopolitical leadership, a tension with significant implications for the United States.
The level of trade policy uncertainty is particularly alarming. According to the Economic Policy Uncertainty Index, compiled by professors at Stanford University and Northwestern University, this specific metric has spiked to levels only witnessed during the peak of the pandemic. Even before President Trump’s “Liberation Day” tariff announcements, it had already surpassed the levelsseen during the Great Recession of 2008-2009. The index further reveals that the trade policy uncertainty index has reached an unprecedented level in the post-World War II era. The “off the charts” reading, coupled with the IMF’s dire predictions of escalating trade wars and intertwined supply-chain vulnerabilities, underscores the profound disruption and unpredictability that current trade policies are injecting into the global economy, directly impacting American businesses and consumers.
Although some lagging economic data might still present a picture of relative strength, emerging trends suggest a potential shift. Reports of increasing layoffs, slowing trade activity, and cautious consumer behavior are becoming more frequent. These early signals hint at a cooling economic environment, raising questions about the resilience of the current expansion. This uncertainty is having a paralyzing effect on businesses and consumers, evidenced by the languishing traffic at the Port of Los Angeles, reminiscent of the early pandemic. Adding to the concern, traditional recession-fighting tools appear limited, with inflation likely constraining the Federal Reserve’s ability to lower interest rates and safety nets already stretched thin. Reflecting this growing unease, betting markets now predict a significant 60 percent chance of a recession this year, a sentiment shared by JPMorgan Chase.
This pessimism is further underscored by the unprecedented behavior of financial markets: fewer than 100 days into Trump’s presidency, investors are reportedly treating the United States as a poorly managed, crisis-prone, and unstable country, dumping U.S. Treasury bonds and shunning virtually all American assets—a stark departure from past financial crises when U.S. Treasuries were seen as a safe haven, even during the 2008 meltdown. This erosion of trust in U.S. financial instruments has significant implications for the cost of borrowing and the overall stability of the American economy.
Beijing’s Counter-Narrative of Regional Stability
Against this backdrop of palpable uncertainty, the narrative emerging from Beijing, takes on a particular resonance. A detailed readout from the Chinese Foreign Ministry regarding President Xi Jinping’s recent Southeast Asian tour meticulously emphasizes the themes of “stability” and “certainty.” The term “stability” appears seven times in the readout, often in the context of promoting regional peace and economic prosperity. The concept of “to travel steadily and reach far” further underscores this emphasis on a stable and long-term vision for regional partnerships.
The readout’s repeated focus on building a “community with a shared future” with these nations suggests a long-term commitment to shared stability and mutual support. Notably, China’s trade with Association of Southeast Asian Nations (ASEAN) reached $982 billion in 2024, representing a 9 percent increase compared to the previous year, solidifying ASEAN’s position as China’s top trading partner, which underscores the deep economic interdependence that Beijing likely seeks to maintain and strengthen for regional stability and potentially as a counterweight to U.S. economic influence in the region.
Furthermore, since April 2025, China has actively sought to project an image of stability and counter the impact of trade tensions through several key initiatives. High-profile economic and trade events like the China International Consumer Products Expo(CICP), which opened on April 13 and attracted over 1,700 companies and 4,100 brands from 71 countries, and the Canton Fair, opening on April 15 with a vast exhibition space and record-breaking attendance of international buyers, demonstrate China’s commitment to open markets and global economic engagement, signaling a strong resolve against protectionism.
Moreover, China is actively pursuing international cooperation to mitigate the fallout from trade disruptions. The meeting of trade ministers from China, Japan, and South Korea in March 2025, where they agreed to enhance collaboration, counter the impact of U.S. tariffs, strengthen supply-chain cooperation and export-control dialogue, and accelerate free trade agreement negotiations, underscores a regional effort to create stability through collective action and the reinforcement of multilateral trade mechanisms. On April 21, China announced further measures to accelerate the expansion of openness in its services sector. The Ministry of Commerce and other departments introduced a comprehensive pilot program to ease foreign investment restrictions in several key areas, including telecommunications, healthcare, and finance.
China’s pronouncements and actions position it as a source of stability in a turbulent world, a “rational, strong, and reliable partner,” as noted by Malaysian Prime Minister Anwar Ibrahim. By emphasizing multilateralism, opposing unilateral tariffs, and advocating for free trade, China presents itself as a champion of a stable and predictable international economic order. The consistency and transparency of China’s own domestic and international policies will be critical, however, in translating this rhetoric into tangible trust and a truly predictable environment.
Bridging the Divide
The divergence between the high economic policy uncertainty index and the repeated calls for stability underscores a fundamental challenge: navigating a world where the desire for predictability clashes with the realities of geopolitical and economic volatility.
Recent reports of the Trump administration considering significant tariff cuts on Chinese imports, alongside the U.S. Treasury Secretary’s optimism for a trade deal contingent on reciprocal reductions, signal a possible shift in U.S. policy. These developments, reflected in market reactions, highlight the need for diplomacy to stabilize the global economy.
Ultimately, navigating this complex landscape demands more than just rhetoric; it necessitates tangible steps from all major global players to foster genuine cooperation and a more predictable international order.
This first appeared on FPIF.