China’s top policy making bodies met on March 08, the agenda, how to get out of the prevailing recession and face the new challenge of Trump’s tariffs which is virtually leading to a Trade War as the US has unleashed huge tariffs on its most trusted partners China, Mexico and Canada.
China’s ruling party, the National People’s Congress Party held its plenary session at its capital Beijing and it was unanimous in sending a clear message to the United States,
China’s rise to power as one of the worlds’ most powerful national cannot be halted or interrupted with tariffs.
As US President Donald Trump ratcheted up economic pressure on China over the past week, Beijing sent back its own message: Its rise won’t be interrupted, US news network CNN said in an analysis sent from Beijing.
A major political meeting taking place in the capital was the ideal backdrop for Beijing to respond. The “two sessions” gathering of China’s rubber-stamp legislature and its top political advisory body is where the government reveals its plans and sets the tone for the year ahead. The top item on its priority list? Boosting consumer demand to ensure China doesn’t need to rely on exports to power its vast but slowing economy. And the next: driving forward leader Xi Jinping’s bid to transform the country into a technological superpower, by ramping up investment and enlisting the private sector.
Beijing is girdling up to face new challenges mounting on its slowdown in the economy. The measures the country is proposing could be a protracted economic showdown with the United States. The challenge: Trump doubled additional tariffs on all Chinese imports to 20% and has threatened more to come – as well as tighter controls on American investment in China.
“We can prevail over any difficulty in pursuing development,” China’s No. 2 official Li Qiang told thousands of delegates seated in Beijing’s Great Hall of the People at the opening meeting of the National People’s Congress Wednesday. The “giant ship of China’s economy” will “sail steadily toward the future,” he said.
A foreign ministry spokesperson in Beijing was more forthright in his response: There was a clear admission that China and USA were experiencing trade frictions. China has a favourable trade balance with $750 billion. “If the US insists on waging a tariff war, trade war, or any other kind of war, China will fight till the end,” he told reporters.
China is on the path to regain its swagger pre covid. China is emerging from its own excessive controls imposed during Covid when it led the world in controlling the pandemic with its Zero Tolerance measures. China had to battle a property sector crisis and a tech war with the US, especially in the field of Artificial Intelligence which is redefining the IT and other services land scape. Then US president Joe Biden banned critical components exports of semiconductors finding applications in AI fearing they would find their way to Chinese military applications. Nvidia was one of the worst affected companies by Biden’s measures.
What was the rhetoric that resounded in the plenary session of the party? “Confidence” has been an unofficial buzzword of the weeklong event, which ends Tuesday. It was used nearly a dozen times during a press conference held by China’s economic tsars on Thursday, splashed across state media coverage and included in a pointed reminder – that “confidence builds strength”– during the closing lines of Li’s nationally broadcast speech, CNN said in its analysis.
China’s optimism could be described as being more aspirational than what exactly is the reality. Many in China look to the future with uncertainty. They’re more willing to save than spend, while young people are struggling to find jobs and feeling unsure whether their lives will be better than those of their parents.
However, China has entered 2025 with greater confidence, buoyed by the market-moving successes of Chinese firms and technology. And while Trump’s return has Beijing concerned about economic risks, it’s also eyeing opportunity for its own rise.
“By the end of Trump’s second term, America’s global standing and credibility image will have gone down,” People’s Liberation Army Sen. Col. (ret) Zhou Bo, a senior fellow at Tsinghua University’s Centre for International Security and Strategy in Beijing, told CNN. “And as American strength declines, China, of course, will look more important.”
Confidence boost
This new found Confidence mood swing isn’t just cascading in the halls of power. The capital’s streets see a steady gleaming home grown electric vehicle traversing weaving through the busy traffic, including those from carmaker BYD, which now goes toe-to-toe with Elon Musk’s Tesla for global sales – a reminder of China’s successful push to become a leader in green tech.
Then there’s the box office record-smashing animation “Ne Zha 2” and the breakout success of privately owned Chinese AI firm DeepSeek. Its large language model shocked Silicon Valley and upended Western assumptions about the costs associated with AI.
In Beijing this week, “you can ask DeepSeek” has been a playful and proud punch line in casual conversation.
“Last year, people may have been impacted by the US narrative that China is declining, that China has peaked,” said Wang Yiwei, director of the Institute of International Affairs at Renmin University in Beijing. “We still have many difficulties. We still have many problems, of course, but it’s not that we’ve reached peak China.”
Trump doubling down on tariffs against China only reflects the country’s rise to power as technology giant and as trading power if one were to walk on the streets of Beijing and gather from the conversations that the Chinese are having.
“China is developing quickly now and that’s attracted international attention, especially from the United States,” but that may not be a bad thing, said a medical graduate student surnamed Xia. “Trump’s increase on tariffs is competition … (and) if there’s no competition maybe China’s independent development is not sustainable.”
The High Stakes Rivalry
International observers say the economic stimulus measures announced this week by Beijing’s leaders at the communist party’s plenary session shows China is girding itself for major challenges to come.
Premier Li alluded referenced that very much in his opening address. “The external environment is becoming more complex and severe, which may have a greater impact on the country’s trade, science and technology and other fields,” he said. China doesn’t want to deal with that volatility while also grappling with a weak economy at home. That’s one reason why it’s trying to boost consumption and spur growth, setting an ambitious expansion target of “around 5%” this year. Beijing is also aware that trade frictions mean the economy needs to rely less on exports.
“It is likely that Beijing has thought through the scenarios of Trade War 2.0, but whatever happens, it is clear that China’s growth will have to rely more on domestic demand,” said Bert Hofman, a professor at the East Asian Institute at the National University Singapore and former World Bank country director for China, in a note.
Still, some analysts say Beijing’s initiatives are short on details and much less aggressive than needed to rev up the economy and boost consumer confidence. “It adds up to a sense by the leadership that they want to refocus on growth and development, but still a desire to do only as much as necessary in terms of stimulus to get there,” said Michael Hirson, a fellow at the Asia Society Policy Institute’s Centre for China Analysis.
Xi may also be balancing this goal with another concern: a need to save some firepower to support the economy if China faces “a nasty four years dealing with Donald Trump,” he said.
Beijing also wants to direct resources toward the high-tech transformation of its economy and industries. That’s another key part of the government’s 2025 agenda – and a long-term objective of Xi, who unlike US presidents is not subject to term limits on his leadership.
Beijing is pushing for innovations in AI, robotics, 6G and quantum computing, announces a state-backed fund to support tech innovation and even welcoming foreign enterprises – in a significant tone shift for Xi – to play a role.
China is still smarting from the first Trump administration’s campaign to keep its tech champion Huawei out of global mobile networks and from the Biden administration’s efforts to convince allies to join it in cutting Chinese access to advanced semiconductors.
Last month, Washington said it was considering expanding restrictions on US investment in sensitive technologies in China.
But Beijing touted its confidence in advancing no matter the barriers put up against it. “Be it space science or chip making, unjustified external suppression has never stopped,” Chinese Foreign Minister Wang Yi told reporters Friday. “But where there is blockade, there is breakthrough; where there is suppression, there is innovation.”
“We are witnessing an ever-expanding horizon for China to become a science and technology powerhouse,” he said.
The 4-year Trump threat- 2025-2029?
Beijing has to face challenges like how much Trump’s policies will affect China remains an open and urgent question. The US president has refrained so far from slapping Chinese imports with the blanket 60% or more tariffs that he had threatened on the campaign trail.
He’s been focused elsewhere, including on unleashing sweeping changes to US global leadership by decimating US foreign assistance, threatening to take control of other countries’ sovereign territory, and upending US alliances in Europe, while pulling closer to Russia at the expense of Ukraine, the networks analysis revealed.
Beijing faces potential challenges in that shake-up. For example, if a Washington-Moscow rapprochement pulls Xi away from Russian President Vladimir Putin, his closest ally, or if an American dial-down of security in Europe allows it to ramp up attention on Asia.
But Chinese diplomats have also been taking advantage of the changes to play up their country as a responsible and stable global leader, despite criticisms of Beijing’s own aggressive behaviour in Asia. The south China seas and aggressive stance in the upper reaches of the Himalayas towards its neighbour INDIA.
“A big country should honour its international obligations and fulfil its due responsibilities. It should not put selfish interests before principles, still less should it wield the power to bully the weak,” Foreign Minister Wang Yi said on Friday in response to a question from CNN on Trump’s “America First” policy. China “resolutely opposes power politics and hegemony,” Wang added.
Beijing is taking a cautious approach while Trumps shows a feisty approach in imposing tariffs. Leading trade analysts say Beijing is trying to moderate its response, holding out for a potential meeting between Xi and Trump or perhaps even a deal that could avert an escalating trade war.
China might have immediately retaliated against two sets of US tariffs this year, including levies on US energy and key agricultural goods, but it has largely remained measured in its response or retaliatory measures.
The country’s deficit with the US means it will have less room to hit back if a trade war escalates, but Beijing is expected to be calculating other measures like export controls that it could use for leverage.
The US’s 20% tariffs on Chinese goods could cause the Chinese economy short-term pain, but it will be the US which loses in the long run. China is still an indispensable part of global supply chains. It’s also better prepared to weather this trade war than the last one, because it’s sending goods to more market globally now, data show.
“If you play (imposing tariffs) with a peer competitor, it actually will not work that well compared to if you’re doing this with small countries or medium powers,” said Zhou in Beijing, who is also the author of the forthcoming book “Should the World Fear China?”
China, he said, wants cooperation not friction.
“But since the US is still the stronger side in this relationship, (it will) decide which kind of relationship this is … so China has to say ‘OK – if this has to be to be one of competition, then we must dare to fight,’” he said.
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