The Chinese government has leverage over the two firms. Although Temu has grown quickly, PDD, its parent company, remains heavily dependent on its Chinese business, Pinduoduo. Shein does not sell its wares in the country, but it does rely on Chinese tech talent for its algorithm.

China’s economy showed its first big signs of damage from the trade war, as steep U.S. tariffs pummeled export orders and production at the country’s factories. A gauge of new export orders fell in April to its lowest reading since Covid-19 was ravaging the country in 2022,