Trade Frictions and China's Changing Trade Relations with Developed Countries

China's evolution in the value chain has led developed countries to be more interested in absorbing Chinese exports of high-value and technologically complex products rather than traditional exports like cement and steel. The previous balance in trade relations where China also bought a lot is shifting as Chinese demand softens while exports remain robust, creating dissatisfaction among trading partners. The notion of political liberalization in exchange for economic development in China is no longer believed by Western countries, leading to a breakdown in the political justification for trade. This shift has sparked trade tensions between the US and China, with Europe joining in due to concerns about protecting its auto industry and preventing industrialization through trade with China amidst struggles with high energy prices and wages.