China: US$1.1 Trillion Monetary Stimulus, Temu & Shein vs. USA De Minimis Tariffs & YouTube & Shopee Anti-TikTok Shop Alliance with Jianggan Li- E485

Jianggan Li, Founder & CEO of Momentum Works, and Jeremy Au discussed:

1. US$1.1 Trillion Monetary Stimulus: Jianggan and Jeremy examined China’s recent monetary measures (equivalent to 6% of nominal GDP) boosting consumer confidence and stabilizing the housing and stock markets. The Politburo launched a $114 billion lending pool to support stock buybacks by asset managers and insurers, lowered the policy interest rate by 0.2% and reduced mortgage interest rates by 0.5%. They speculated that fiscal stimulus, including broader consumption voucher programs like the $72 million initiative in Shanghai, is likely to follow. These efforts are intended to stabilize China’s real estate market and restore confidence after a prolonged period of economic slowdown.

2. Temu & Shein vs. USA De Minimis Tariffs: They focused on the de minimis rule, which currently allows imports under $800 to enter the US tariff-free. Jianggan explained how Chinese platforms like Temu (Pinduoduo) and Shein have benefited from this loophole by shipping small goods directly to American consumers. The Biden administration’s efforts to close this loophole will harm low-income American consumers, reducing welfare benefits by $12-14 billion USD. Chinese exporters, particularly smaller ones, may also face challenges, though large platforms are adapting by increasing inventory stored in the US to mitigate this new tariff.

3. YouTube & Shopee Anti-TikTok Shop Alliance: They discussed China’s growing influence on Southeast Asia’s cross-border trade, with Vietnam emerging as a key hub for Chinese companies. Warehouses along the Vietnam-China border are facilitating live-stream sales directly to Vietnamese consumers. Additionally, the conversation touched on YouTube’s partnership with Shopee, which is seen as a strategic move to counter TikTok Shop. This partnership is expected to expand across Southeast Asia, with Indonesia positioned as a critical battleground in the e-commerce space.

Jeremy and Jianggan also touched on other relevant topics, including the impact of US interest rate cuts on global markets, the role of the Chinese Yuan in export competitiveness, and Vietnam’s strategy to navigating the USA-China rivalry.

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