China’s efforts to reignite its economy through a flood of cheap goods are met with a resounding global resistance, marking a multibillion-dollar sequel to the shockwave it sent through the global industry over two decades ago. However, this time, the world strikes back.

The United States and the European Union are threatening to erect trade barriers for electric vehicles and renewable energy equipment manufactured in China. Now, emerging economies like Brazil, India, Mexico, and Indonesia are joining the counterattack, targeting Chinese steel, ceramics, and chemical imports suspected of flooding their domestic markets at dumping prices.

"China is too large to export its way to rapid growth," remarked Treasury Secretary Janet Yellen during her visit to Guangzhou, the first stop on her China tour, where she repeatedly cautioned her hosts against boosting the country's economy through the production of cheap goods. "And if the policy is solely focused on increasing supply without also boosting demand, it will lead to global spillover effects."

Countries are already taking measures to shield their manufacturers from a plethora of cheap products. India alone has initiated anti-dumping investigations on everything from bolts and screws to glass mirrors and vacuum-insulated bottles produced in China. Argentina is investigating Chinese elevators. The UK is scrutinizing excavators and electric bicycles.

The mounting resistance illustrates how the new China shock is fueling tensions in a global trading system already showing signs of wear and tear due to Russia's invasion of Ukraine and Western efforts, led by the USA, to promote domestic industry and decouple parts of their economy from China. The pressure threatens to accelerate a fragmentation of the world economy into countries determined to disentangle China from their supply chains and those caught in its orbit.