Economic Watch: Chinese exporters tapping into home market amid tariff tensions

BEIJING, May 2 (Xinhua) -- In a livestream on Friday, a salesperson with Yangshi New Material Co., Ltd., was touting the excellence of one of its clothing materials for outdoor activities to the Chinese audience.

The Shaoxing-based exporter has been actively exploring the Chinese market in recent years through the expansion of its online and offline sales.

"We have a huge domestic market of 1.4 billion people. This gives us the greatest confidence in times of external disruptions," Zhang Bin, a member of the company's management, told Xinhua.

In the face of U.S. tariff hikes, Chinese exporters are pivoting toward the domestic market, part of their continued efforts to tap business potential in the world's second-largest economy and its huge consumer market.

To Zhang Jingli, general manager of Anhui Good Hope Baby Safety Technology Co., Ltd., the demands of both domestic and foreign markets were in the company's mind from the research and development stage of its products.

Thanks to its strong performance in the domestic market, the company achieved a 25-percent growth in first-quarter sales this year despite fluctuations in foreign markets.

INDUSTRY ON THE MOVE

The Chinese government, both at top and local levels, introduced policy backing for exporters immediately after the latest trade tensions became apparent, while the country's e-commerce giants are using one of the world's most advanced e-commerce ecosystems to accommodate tariff-hit firms.

To help firms in the export industry make the most of their domestic market, China's Ministry of Commerce has met with industry associations, major retailers and distributors to explore approaches to broaden domestic sales channels for export-oriented firms.

In a recent initiative taken by the ministry, quality export products have been taken to supermarkets, stores and online retail outlets nationwide, while also being included in the consumer goods trade-in program.

China's industry associations, major retailers and e-commerce platforms have also made contributions in this regard, establishing channels to put export-clogged inventory on shelves and helping export-focused firms better adapt to the Chinese market.

E-commerce giant JD.com, for instance, has set up a procurement fund totaling 200 billion yuan (about 27.77 billion U.S. dollars) for massive purchasing of export-oriented products over the next year.

Xinhua learned that at least 30,000 such companies have reached out to JD.com for cooperation, thousands of whom have come to the substantive negotiation stage with JD.com.

Tencent, owner of China's most widely-used messaging service WeChat, has launched the "Foreign Trade New Journey Boost Plan." This initiative allows foreign trade companies to broaden domestic and foreign markets through 10 measures -- including green channels for opening stores, incentives for new merchants, traffic support and fee discounts.

Through a combination of WeChat's small programs, online stores and offline stores, sales of foreign trade companies are expected to increase by 100 billion yuan, Tencent said.

Notably, other popular e-commerce platforms such as Meituan, Douyin, Kuaishou and Vip.com have also announced similar initiatives. In addition, brick-and-mortar stores of retailers such as Freshippo, an Alibaba-owned retail platform for groceries and fresh goods, Yonghui, CR Vanguard and Lianhua, are also working to help the products of exporters reach Chinese consumers.

"Helping foreign trade enterprises expand domestic sales is not a temporary measure employed to deal with the impact of tariffs," said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. Instead, it is part of an ongoing transformation in the country as China builds a new development pattern, he noted.

It's worth noting that noticeable progress has been made after years of efforts aimed at "the integration of domestic and foreign trade." In 2024, nearly 85 percent of Chinese exporters were simultaneously engaged in domestic sales activities.

CONSUMPTION UPGRADING

As Chinese exporters actively tailor their products for the home market and incorporate the latest technology, experts have expressed optimism for their future in the domestic market and that their presence will help China achieve consumption upgrade.

While some foreign trade enterprises may face challenges such as channel differences and different market demands, industry associations and platforms are providing timely support and assistance, said Shao Honghua, director of the trade digitization committee of the Statistical Society for Foreign Economic Relations and Trade of China.

"Some of our foreign trade commodities can better meet consumption demands at different levels in China, which will also lead to the emergence of some new demands and achieve the effect of consumption upgrading," said Hong Junjie, special advisor of the national committee of the China Council for the Promotion of International Trade.

Qiao Liang, who's in charge of the R&D of a Suzhou-based robotic pool cleaner maker, told Xinhua that his company will increase investment this year to make their products more technologically advanced and have more added value.

Such products, Qiao believes, will stand out in market and win customers, both domestic and overseas, despite market fluctuations.

Adding more high-quality foreign trade products on the supply side is conducive to providing domestic consumers with more choices, said Dong Yu, executive vice president of the China Institute for Development Planning at Tsinghua University.

"It is also necessary to guide enterprises to enhance their competitiveness by constantly innovating products and services, and jointly expand the market pie," he added. ■