China’s reliance on exports is a focal point in upcoming U.S.-China trade talks. U.S. Treasury Secretary Bessent targets China’s oil purchases from Russia and Iran. Hopes for a trade deal rise after Trump secures deals with Japan, Indonesia, and the Philippines. The U.S. seeks to reduce excess production capacity and boost Chinese consumer spending.

Treasury Secretary Bessent addresses China’s need for rebalancing its economy. China’s global manufacturing exports share is at nearly 30%, prompting the need for a shift. China recognizes factory overcapacity and weak consumer spending as long-term issues. Price wars lead to deflation, impacting business activity and spending power.

Government initiatives aim to boost consumption and rein in overcapacity. Demographic changes pose challenges as China’s population ages. Experts suggest expanding social safety nets to encourage spending. Economist Yan Se warns of long-term deflation without increased welfare benefits for Chinese citizens.

China faces pressure to transform into a technology superpower. High-tech manufacturing output grows rapidly, potentially leading to overcapacity. The government calls for better coordination in economic development policies. The World Bank urges greater reform ambition for sustained improvement in household consumption.

Read more at Yahoo Finance: Can China reduce its export dependence?