As a result of the tariff war between the U.S. and China, Zhejiang Province, a representative affluent region in China, has been hit hard. Zhejiang, one of the wealthiest areas in China, has shown that the damage from soaring tariffs is concentrated due to its high dependence on U.S. exports.
On the 14th (local time), the Hong Kong South China Morning Post (SCMP) reported that last month, U.S. President Donald Trump imposed tariffs of up to 245% on Chinese products, leading to a dramatic decline in exports and economic turmoil for Ningbo, a key city in Zhejiang.
Ningbo is the fifth largest export city in China and a trade hub with one of the world's three largest container ports. Because of this, the ambitious plan to achieve a gross domestic product (GDP) of 2 trillion yuan (approximately 277 trillion won) this year and enter the top 10 city economies in China is facing setbacks.
Fitch Ratings, one of the top three credit rating agencies in the world, analyzed that Ningbo-Zhoushan Port is particularly sensitive to U.S. trade. Last year, exports from Zhejiang to the U.S. accounted for 7% of the regional GDP, with Ningbo accounting for 20% of total exports going to the U.S. This is significantly higher than the national average.
Last month, amid a 21% year-on-year decline in China's exports to the U.S., the decrease in Ningbo is expected to exceed this significantly. As the situation worsened, authorities in Zhejiang effectively transitioned to a wartime response system. Manufacturers received guidelines to report their employment status and changes in pension payments weekly, and Wang Hao, Secretary of Zhejiang Province, visited Yiwu in central Zhejiang, instructing to "prepare for the most extreme situations."
However, local industries criticize that the response from the authorities in Zhejiang was excessively delayed. An official from the Ningbo Intelligent Detection Industry Association noted, "Companies that were highly dependent on U.S. buyers have already lost orders," adding, "Even with tariff reductions, it could take months to recover shipments."
For this reason, the Chinese government is arranging charter flights to relocate corporations to "tariff havens" such as Hungary, Egypt, and South Africa, while the authorities in Zhejiang are also discussing measures to expand insurance coverage for products that have become unshippable due to unpaid bills.
Zhou Zheng, a senior researcher at Chinese research firm Macro Group, stated, "This ceasefire could be the last opportunity" and "Without expanding domestic demand and diversifying export markets, Zhejiang could face another crisis."