How ‘eating bitterness’ has pushed China’s enraged workers to the brink

As the world’s two largest economies square off in the most consequential trade war in nearly a century, metaphors are flying.

“Eat Bitterness,” China’s Xi Jinping often admonishes his people as he urges them to remain strong despite the costs of his economic programs.

“Eat crow” is what many critics hope President Donald Trump will do — as they argue he should stand down on his tariff plans and halt the damage his trade war is doing to the US economy.

China is more vulnerable than Xi believes: Widespread protests against the Trump tariffs’ economic shock spread across the nation this week.

Workers’ fury at layoffs, plant closures and employers’ failure to pay salaries could dangerously accelerate social unrest.

But Trump, too, faces risks in this high-stakes game.

Xi has accelerated Beijing’s past efforts to build self-sufficiency and in effect to decouple from US economic supremacy.

His decade-long “Made in China 2025” program pushed state resources into the goal of dominating global production in the most important industries of the modern economy.

Meanwhile, Beijing’s “Belt and Road Initiative” to link other nations to the Middle Kingdom economically and politically, its BRICS grouping of mostly authoritarian states and its Shanghai Cooperation Organization for trade and finance all aimed to construct pillars of an economic bloc separate from the US-led global system.

Xi’s ongoing attempt to set up a payment and finance system for global trade and to undermine dollar dominance crowns his program.

Yet the economic structure of Xi’s scheme depends on exports to maintain the steady growth of the Chinese economy — mainly exports to the United States.

In sharp contrast with the US and most developed economies, household consumption in China only accounts for about 40% of GDP, while fixed capital investment in infrastructure and factories hovers around one-third. Last year exports represented 18% of China’s GDP.

China continues to invest in new goods manufacturing instead of consumption: Its capacity in steel, autos and solar panels is at least 150% of its domestic consumption of these products, resulting in the stampede to export.

Real-estate investment in China is now a source of weakness and financial distress, with values plummeting since the COVID-19 pandemic. The blow to personal wealth has undermined consumption.

In these circumstances, most economists argue that China should boost domestic consumption to keep its growth engine vibrant.

But Xi is adamantly opposed to what he calls “welfarism.”

He disdains improvements in old-age pensions and unemployment insurance — rural retirees receive as little as $160 per month — and underinvests in medical care, education and basic social welfare programs.

“To promote common prosperity, we cannot engage in welfarism,” he declared in 2022. ”It will inevitably bring about serious economic and political problems.”

China’s anemic social welfare system compels its citizens to save for elder and child care, decent education and medical emergencies — not to spend on consumer products.

All this means “eating bitterness” has become China’s daily reality, as much of its economy’s apparent modernization benefits not its own people, but the rest of the world through subsidized exports.

Many indicators of public sentiment, including government surveys, show growing discontent among young and old alike.

Low birth and marriage rates point to a lack of confidence in the future, and the youth phenomenon of “laying flat” (dropping out) is another sign of disillusion.

Trump’s tariffs add stress to an already teetering Chinese economy beset by deflation, declining tax revenues, massive layoffs and consistently high youth unemployment.

Xi has already had to back down from Beijing’s declared tariffs on 25% of imports from the US — and has reportedly sought behind-the-scenes negotiations with the Trump team.

Trump, on the other hand, is facing the prospect of higher inflation, soaring retail prices and weak bond markets.

Key US defense and manufacturing industries could soon be harmed by China’s ban on sales of critical minerals.

Given China’s internal weaknesses, Trump would do well to cultivate cooperation with US allies, instead of confronting them with tariffs.

Joint action could weaken Beijing’s trade-war resolve — but the tenor and substance of Trump’s criticism of allies thus far poses a real impediment to their assistance.

Still, Xi’s ideological opposition to improving social welfare and increasing domestic consumption, and his insistence on relying on exports for China’s economic growth, put him at a disadvantage in this battle.

If Trump can withstand the domestic pushback, Xi is the one who will end up eating crow.

Thomas J. Duesterberg is a senior fellow at Hudson Institute.