One, the internal demand and resilience of mainland China.

China has the world's second-largest consumer market, which can partially offset the impact of export disruptions. The recent meeting of the Political Bureau of the Communist Party proposed supporting companies and employment affected by tariffs through accelerated special bond issuance and lowering the reserve requirement ratio, as well as promoting the development of the service industry and domestic consumption.
The State Council has also released a 'special action plan', including measures to increase residents' income and establish childcare subsidies, aimed at boosting domestic demand and alleviating consumer confidence issues.

Two, the technological layout and supply chain advantages of mainland China.

In strategic fields such as 'next-generation artificial intelligence' and 'renewable energy', China is increasing R&D investment to promote the implementation of 'domestic substitution'.
Xi Jinping emphasized relying on the 'national unified system' to strengthen basic research and industrial application, and mentioned the case of DeepSeek launching a low-cost AI inference model under limited computing power conditions.
The model developed by China's startup DeepSeek has been integrated into products by foreign companies such as BMW, showcasing China's advantages in intelligent manufacturing and supply chain integration.
As a global leading supplier of electric vehicles and batteries, BYD is continuously pushing forward in new energy technology and overseas expansion, with its net profit in the first quarter surging over 100% year-on-year, and plans to double overseas sales by 2025.

Three, the geopolitical economic changes brought by Trump 1.0.

Since the first round of tariff impacts in 2018, China has rapidly promoted the construction of the 'Belt and Road' initiative, deepening infrastructure and trade cooperation with regions such as Southeast Asia, Latin America, and Africa.
China is also accelerating the diversification of agricultural imports, significantly reducing its reliance on US soybeans from previous high levels, shifting to suppliers like Brazil, while state-owned enterprises maintain some US soybean purchases to ensure oil quality.
Currently, China has become the largest trading partner of over 60 countries and has accumulated a historic trade surplus, making unilateral pressure from the US more challenging; many countries have clearly refused to choose between China and the US.

As of January 2025, China holds approximately $1.1 trillion in US Treasury bonds, second only to Japan, but any large-scale sell-off would lead to a stronger dollar and increased losses from its own bond sell-off, thereby weakening export competitiveness.
The US Treasury Secretary also stated that China has no intention of using Treasury bonds as a weapon because once sold, it would be forced to repurchase RMB, exacerbating the appreciation of its own currency, which is contrary to its policy objectives.

Five, rare earths have become China's true strategic weapon.

In April 2025, in response to Trump's tariff increases, China announced export controls on seven types of medium and heavy rare earths, such as dysprosium, yttrium, and terbium, requiring applications for licenses from the Ministry of Commerce.
China controls over 90% of the world's rare earth refining capacity. Although this move is not a complete embargo, it can leverage global supply chains through quotas and approval rhythms, making it difficult to be replaced in the short term.
At the same time, China has sent signals to countries like South Korea not to supply relevant rare earth products to the US military industry, further highlighting the strategic position of rare earths in high technology and national defense.