Domestic Macro - Demand Side - As of July 4, 2023, the passenger car sales in June reached 2.032 million units, a year-on-year increase of 15.8%[2] - The average number of domestic flights in July was 14,200, a month-on-month increase of 11.46%[2] - The Baltic Dry Index (BDI) averaged 1,442.75 as of July 4, 2023, a month-on-month decrease of 13.9% and a year-on-year decrease of 24.6%[2] Domestic Macro - Production Side - As of July 4, 2023, the operating rate of blast furnaces was 83.44%, a slight decrease of 0.4 percentage points[3] - The operating rate for automotive semi-steel tires was recorded at 70.41%, a month-on-month decrease of 7.64 percentage points[3] - PTA production reached 1.416 million tons as of July 3, 2023, maintaining a high level compared to the past four years[3] Price Performance - As of July 4, 2023, the average wholesale price of pork increased by 0.75% week-on-week, while the futures settlement price of live pigs rose by 2.43%[2] - Brent crude oil prices fell by 0.25% while WTI crude oil prices increased by 0.90% as of July 4, 2023[3] Fiscal and Monetary Policy - This week, the issuance of ordinary government bonds reached 199.9 billion, with an issuance progress of 55.5%[3] - The central bank's liquidity support remains ample, with a net withdrawal of 1.38 trillion from reverse repos this week[3] International Macro - U.S. Economic Data - The U.S. non-farm payrolls added 147,000 jobs in June, exceeding expectations, primarily due to a significant increase in state and local government education jobs[4] - The U.S. manufacturing PMI for June was reported at 49.0, slightly better than the expected 48.8, indicating a contraction in manufacturing activity[4]

Domestic Macro - Demand Side - As of July 4, 2023, the passenger car sales in June reached 2.032 million units, a year-on-year increase of 15.8%[2] - The average number of domestic flights executed this week was 14,200, a month-on-month increase of 11.46%[2] - The Baltic Dry Index (BDI) averaged 1,442.75, a month-on-month decrease of 13.9% and a year-on-year decrease of 24.6%[2] Domestic Macro - Production Side - As of July 4, 2023, the operating rate of blast furnaces was recorded at 83.44%, a slight decrease of 0.4 percentage points[3] - The operating rate for PTA production was 79.13%, maintaining a high level[3] - The operating rate for automotive semi-steel tires was 70.41%, a month-on-month decrease of 7.64 percentage points[3] Price Performance - As of July 4, 2023, the average wholesale price of pork increased by 0.75% week-on-week, while the futures settlement price rose by 2.43%[2] - Brent crude oil prices fell by 0.25%, while WTI crude oil prices increased by 0.90%[3] - The prices of rebar and iron ore increased by 1.36% and 0.99% respectively this week[3] Fiscal Policy - This week, the issuance of ordinary government bonds reached 199.9 billion, with an issuance progress of 55.5%[3] - New special bonds (excluding debt replacement) amounted to 45.8 billion, with an issuance progress of 48.7%[3] Overseas Macro and Market - The "Big and Beautiful" Act is expected to increase the deficit by $3.4 trillion over ten years, potentially pushing the U.S. deficit rate to 7%[4] - The U.S. non-farm payrolls in June added 147,000 jobs, exceeding expectations, primarily due to a significant increase in state and local government education jobs[4] - The ISM manufacturing PMI for June was reported at 49.0, slightly better than the expected 48.8, indicating a contraction in manufacturing[4]

Core Viewpoint - The article discusses the impact of the ongoing US-China tariff war on trade dynamics, highlighting the resilience of Chinese exporters and the complexities of international trade negotiations amid rising tariffs and geopolitical tensions [2][6][7]. Group 1: Tariff Impact on Chinese Exporters - Chinese exporters, such as Dongyi Yangshan Technology and Shuangtong Straw Company, are adapting to the fluctuating tariff environment, with some clients resuming orders despite high tariffs [3][10][11]. - The article notes that the average effective tariff rate for US imports from China is around 41%, while China's effective tariff rate on US imports is approximately 28% [5][6]. - Despite the high tariffs, the demand for Chinese products remains strong, as US consumers are likely to absorb some of the increased costs [11][14]. Group 2: Trade Dynamics and Market Adjustments - The article highlights a significant increase in container shipping bookings from China to the US, with a reported surge of nearly 300% following the announcement of tariff reductions [4][5]. - Companies are finding ways to mitigate tariff impacts, such as using DDP (Delivered Duty Paid) shipping methods, which can reduce the cost burden of tariffs [12]. - The ongoing tariff situation has led to a re-evaluation of supply chains, with some companies considering diversifying their markets beyond the US [16][18]. Group 3: Future Trade Negotiations and Economic Implications - The article emphasizes the uncertainty surrounding future tariff negotiations, with potential for tariffs to rise again after the 90-day negotiation window [6][22]. - Experts suggest that the US-China trade conflict reflects deeper structural issues in global trade and economic governance, with calls for both nations to work collaboratively to address these challenges [7][35]. - The article warns that a prolonged trade conflict could lead to a "hard decoupling" of the US and Chinese economies, which would have significant implications for global trade [17][26].

Core Viewpoint - The Yiwu small commodity market demonstrates strong market adaptability, significant product advantages, and risk diversification, allowing it to respond relatively calmly to unprecedented tariff wars [2][51]. Group 1: Market Response to Tariff Wars - The Yiwu market has shown resilience despite the tariff wars, with a notable recovery in trade with the U.S. as tariffs were temporarily eased [8][51]. - In 2024, Yiwu's import and export volume with the U.S. reached 91.07 billion yuan, accounting for 13.6% of its total trade, with a growth rate of 42.8% [13]. Group 2: Business Strategies and Attitudes - Three main attitudes among Yiwu merchants include aggressive market transformation, confidence in product irreplaceability, and a general indifference to the U.S. market due to its relatively low share in their overall business [12][26]. - Merchants are actively seeking to pivot towards the EU market and other regions, with strategies such as lowering prices and increasing production volume to maintain sales [18][39]. Group 3: Market Diversification - Many Yiwu businesses report that their U.S. market share is low, typically between 10% and 20%, leading to a limited focus on U.S. trade [26][27]. - The Yiwu market is increasingly looking towards emerging markets, with significant growth in trade with Africa, Latin America, and ASEAN countries, which now surpasses the U.S. market in scale [65][67]. Group 4: Challenges and Opportunities - The transition to new markets presents challenges, including adapting to different consumer expectations and regulatory requirements [45][61]. - Despite the difficulties, the shift towards emerging markets is seen as a long-term growth strategy, with many businesses optimistic about future opportunities in these regions [62][68].

Core Viewpoint - Yiwu has transformed from a resource-poor county into a global hub for small commodities, significantly contributing to the economic landscape of Zhejiang province and showcasing the success of China's reform and opening-up policies [3][4]. Economic Performance - In 2024, Yiwu's GDP reached 250.35 billion, ranking seventh among county-level cities nationwide and second in Zhejiang, only behind Cixi [4]. - Yiwu's GDP accounts for 36.1% of the total GDP of Jinhua city, a figure that is significantly higher than the ratios of other strong county-level cities to their respective prefecture-level cities [5]. Transportation and Infrastructure - Yiwu serves as a central hub for transportation in Jinhua and central Zhejiang, with an international airport and major high-speed rail lines intersecting there [6]. - The urban planning in Zhejiang refers to the Jinhua-Yiwu-Dongyang metropolitan area as the "Jinyi Metropolitan Circle," highlighting Yiwu's importance in the region [8]. Trade and Commerce - Yiwu is characterized by a high volume of foreign trade, particularly with Middle Eastern and African merchants who often purchase goods directly from Yiwu rather than through local agents in major Chinese cities [9]. - The Yiwu International Trade City is a significant marketplace, with a vast array of products available at low prices, making it a key destination for international buyers [18]. Cultural and Historical Context - The historical context of Yiwu's development is tied to its unique geographical and economic conditions, which have fostered a thriving private economy even in regions traditionally considered less developed [28].

Group 1 - The executive order signed by President Trump on April 2 imposes tariffs on cross-border e-commerce, significantly impacting trade between the U.S. and China [1][3] - The new tariffs will increase costs for U.S. consumers, who previously enjoyed low prices for goods from China, as they will now face additional charges [5][9] - The threshold for duty-free imports has changed, with items under $800 now subject to tariffs, leading to price increases for small goods [7][9] Group 2 - The tariff structure includes a 30% duty on the product price or a flat fee of $25 per item, which may rise to $50 after June 1 [9][11] - The majority of consumers purchasing these goods are middle and lower-income families in the U.S., increasing their economic burden [9][11] - Some foreign brands have ceased shipments to the U.S., and smaller American businesses are withdrawing from the market, reducing options for consumers accustomed to affordable Chinese products [15] Group 3 - China's manufacturing sector has grown significantly, accounting for 30% of global manufacturing by 2023, with a total output projected to reach 39.9 trillion yuan in 2024 [17][23] - The U.S. has historically relied on affordable Chinese goods, and the new tariffs may lead to higher prices for American consumers, particularly affecting the availability of low-cost products [27][31] - The CEO of a U.S. logistics company expresses concern over the impact of increased tariffs on supply chains, especially for small and medium-sized enterprises that rely on timely imports [31][33]

Core Viewpoint - Despite the challenges posed by increased tariffs from the United States, Chinese manufacturers in Yiwu remain optimistic and are actively seeking to expand into other global markets [1][3][4]. Group 1: Impact of Tariffs - The U.S. has raised tariffs on Chinese imports to 145%, leading to a significant reduction in orders from American clients [3][5]. - The trade war is expected to reduce bilateral trade volume by 80% according to WTO data [3]. - Many manufacturers in Yiwu are experiencing a decline in U.S. orders, with some companies reporting that only 20% of their clients are American, down from 80% pre-pandemic [5][8]. Group 2: Market Diversification - Manufacturers are increasingly diversifying their customer base, with a focus on markets in Africa, Latin America, and ASEAN, which have shown significant growth [8][12]. - Yiwu's total import and export value reached 668.93 billion yuan in 2024, with exports amounting to 588.96 billion yuan, reflecting a year-on-year growth of 17.7% [8]. - The strategy to reduce reliance on the U.S. market is evident, as companies are redirecting orders to Europe and domestic markets [4][14]. Group 3: Resilience and Adaptation - Business owners express a strong sense of unity and determination to overcome the challenges posed by U.S. tariffs, indicating a collective resolve to adapt [3][15]. - The Chinese government is facilitating support for foreign trade enterprises to expand domestic sales channels, which is seen as a buffer against the impact of tariffs [13][15]. - Many suppliers in Yiwu are optimistic about their ability to navigate the trade war, emphasizing their commitment to hard work and resilience [15].