Here's why developing nations are leading trade investigation against China

China faced record 160 trade investigations in 2024, with developing nations leading the pushback over overcapacity concerns; India, EU, and Brazil top the list of initiators

China’s export dominance continued in 2024, but its tensions with trading partners are rising. The country recorded a historic surge in trade barriers during the year, as developing nations raised alarms over its production overcapacity.

 

Last year, China’s trading partners initiated 160 trade investigations into its products, marking a significant rise from 69 cases in 2023, according to a report by South China Morning Post, which cited data from China Trade Remedies Information, a platform under its Ministry of Commerce. However, these 160 investigations exclude high-profile cases, such as the European Union’s investigation into Chinese electric vehicles announced in late 2023. When considering cases, where China was one of multiple countries under investigation, the total climbed to 169, compared with 79 in 2023.  

 

Developing nations lead the pushback  

As many as 28 trading partners reportedly launched probes into Chinese imports in 2024, up from 18 in the previous year. Developing countries such as Thailand, Peru, and Pakistan joined the fray, highlighting a shift in global trade dynamics.  

 

Liang Yan, an economist at Willamette University, US, noted that many developing nations launched these investigations as precautionary measures to shield their markets from a potential influx of redirected Chinese exports. Countries such as Brazil and Turkey, for instance, sought to encourage Chinese investment in their electric vehicle sectors by raising tariffs.  

India and EU take the lead  

India spearheaded the investigations, initiating nearly a quarter of the cases against Chinese imports. The EU followed with 21 cases, more than double its tally of nine in 2023. Brazil initiated 18 cases — a fivefold increase compared with the previous year — while the US accounted for 15 cases.

 

Most investigations centred on anti-dumping cases involving industries such as iron, steel, and chemical production. According to Liang, these sectors have been affected by China’s surplus production capacity, driven in part by a slowdown in its domestic real estate market, the news report mentioned.

 

While some argue that China’s ‘overcapacity’ narrative is exaggerated, Liang pointed out that heightened competition has pressured industrial prices and profits, contributing to trade disputes.  

 

China’s leadership had flagged overcapacity in December 2023 as a key economic challenge for 2024, a prediction that aligned with the surge in trade investigations. To address these challenges, Beijing is expected to pursue negotiations, implement retaliatory measures, diversify its export destinations, and expand investments in overseas markets.  

US-China trade relations 

The swearing-in of US President-elect Donald Trump has added further uncertainty to trade relations. While it remains unclear if Trump will impose sweeping tariffs on Chinese goods, Liang suggested that the impact may be limited. She highlighted that the US share of China's exports had declined from 19 per cent to 13 per cent, as China continues to diversify its trade partners and stimulate domestic demand.