As global trade braces for other tremor from Donald Trump's tariff offensive, a sharper warning has appeared from India. Kotak Mutual Fund MD Nilesh Shah took X with a dull evaluation of China's reaction to growing trade barriers: “China exports deflation and recession into the world.”
They say that the total scale of the Chinese production engine – based on a ruthless strategic intention – will force the country to calibrate their own economic books again.
And the message is not covered with sugar. “Each country will have to compare them to China and copy their policy” Sam, Dam, Dand, Bhed “to be competitive,” writes Shah, evokes an ancient Indian strategy of persuading, incentives, punishment and fraud.
The Chinese trade surplus for 2025 is ready to hit almost trillion dollars and place it around the world as the only largest clean exporter. For context, only two other economies are predicted – Germany and the US – this year to achieve exports exceeding trillion dollars, nor close to the agreement of Chinese surplus.
In the middle of the aggressive tariff pressure of Trump, cheap Chinese goods – relevant from the US – are now flooding developing markets. Lands from Southeast Asia to Latin America are struggling with losses of jobs, the collapse of local industries and rising business imbalances. Deflation ripple, according to Shaha, is not just an economic anomaly – it's a global threat.
“China exports deflation and recession into the world,” he warns, suggests that economic return wounds from this export gluten will be widespread and systemic. According to Shaha, the country has no choice but to adapt – not only in terms of business policy, but through strategic maneuvering that reflects China's inexorable focus on the advantage.
“Each country will have to compare them to China and copy their policy” Sam, Dam, Dand, Bhed “to be competitive,” Shah repeats.
