While global trade is accompanied by another tremor of Donald Trump’s tariff offensive, a clearer warning emerged from India. Kotak Mutual Fund, MD Nilesh Shah, went to X with an blunt assessment of China’s response to increasing commercial barriers: “China will export deflation and recession to the world.”
He argues that the magnitude of the manufacturing engine of China – supported by a ruthless strategic intention – will force countries to recalibrate their own economic textbooks.
And the message is not coated with sugar. “Each country will have to compare them in China and copy their policy” Sam, Dam, Dand, Bhed “to be competitive,” writes Shah, evoking an old Indian strategy of persuasion, incentive, punishment and deception.
China’s trade surplus for 2025 is about to strike near a dollars Billion, positioning it as the largest net exporter in the world. For the context, only two other economies – the Ermante and the United States – should make exports superior to a dollars Billion this year, and neither is close to the surplus of China.
In the middle of Trump’s aggressive pricing thrust, cheap Chinese products – Reduced from the United States – now floods emerging markets. The countries of Southeast Asia to Latin America are struggling with job losses, the collapse of local industries and the rise of commercial imbalances. According to Shah, the deflationary undulation is not only an economic anomaly – it is a global threat.
“China will export deflation and recession to the world,” he warns, suggesting that the economic return of this export overabundance will be widespread and systemic. In Shah’s opinion, countries have no choice but to adapt – not only in terms of commercial policy but by strategic maneuvers which reflect the implacable accent of China on the advantage.
“Each country will have to compare them in China and copy their policy” Sam, Dam, Dand, Bhed “to be competitive,” reiterates Shah.
