The main Chinese leaders sought to project confidence in the country’s economy on Wednesday despite slow growth, commercial escalation with the United States and increasing geopolitical uncertainty caused by the Trump administration.
The government will aim to extend the economy of China by “around 5%” this year, said Prime Minister Li Qiang, the highest official in China after Xi Jinping, at the opening of the annual session of the country’s rubber complex.
Li recognized that the economy was confronted with many challenges and that “arduous efforts” would be necessary to achieve the objectives. But he struck a positive note on the country’s prospects, saying: “The underlying trend of long-term economic growth has not changed and will not change. The giant ship of the Chinese economy will continue to cleave the waves and navigate regularly to the future. »»
The Beijing meeting, called the Congress of the National People, is a closely scripted political competition which takes place for several days, showing how Mr. Xi plans to lead China through what he has often described as “great invisible changes in a century” in the world.
Mr. Xi’s vision includes the uprising of technological prowess of China and self-sufficiency and to strengthen its military capacities so that it can dominate the Asia-Pacific region. He focuses on strengthening the grip of the Communist Party in power over power by making national security a priority for all facets of Chinese society. Security was tightened during the legislative session, which brings about 3,000 delegates to the Greater People’s Hall, with the police published at several control points near the site.
Mr. XI and his senior officials tried to restore faith in the economy, which had trouble resuming momentum after being beaten by the pandemic and a housing market which destroyed a large part of the wealth of many Chinese in the middle class. But reaching this objective of around 5% growth will be even more difficult than in previous years due to a trade war with the United States which shows few signs of slowdown.
Xi held firm against Washington, reporting that China must be treated as an equal. He refused to bow to American pressures as the leaders of Canada and Mexico did it with Mr. Trump after the US President called for the first time to 25% of prices on their country in January. Rather, China responded with commercial reprisals, the last of which was announced on Tuesday and targeted US agricultural states that were sworn in Trump in last year’s elections. “We are ready to fight until the end,” said a spokesman for the Ministry of Foreign Affairs.
To help consolidate growth, the government has declared that it would increase its deficit to 4% of the overall production of the economy, against an initial objective of 3% last year. Such a major change in policy indicates the preparation of China to increase public loans, the money that can be used to stimulate the economy.
But more than that, China needs households to start spending again to change its fortune. Consumer confidence has been seriously affected by the housing market crisis. In a recognition of this, Beijing has lowered its objective for 2%consumer price inflation, its lowest level in more than two decades. However, those who were looking for Wednesday announcements for signs of more daring solutions to help households, such as more health insurance and pensions for retirees, were disappointed.
China has not lacked growth target since 2020, when its economy has decreased due to the cocovio pandemic, although economists abroad has long debated the veracity of the country’s economic data.
Under Mr. XI, Beijing underlined the domination of the public sector and rocked entrepreneurs with repressions against private companies. But in recent months, Chinese leaders, including Mr. Xi himself, have been more willing to recognize the importance of private companies to fuel economic growth.
Last month, Mr. XI held a rare meeting with business leaders, including Jack Ma, the founder of the Internet giant Alibaba, who had been sidelined for four years for criticizing Chinese regulators. XI also praised technology as a leading development engine and a means for China to become less vulnerable to pressures from the United States. (To this end, the government also said that it would support the development of advanced technologies such as artificial intelligence and autonomous conduct, as well as that of renewable energies.)
Analysts say that China is better prepared for Mr. Trump now than during his first mandate, showing a determination to engage in commercial measures in Tit-For-Tat and by increasing diplomatic engagement to counter American pressure.
This was highlighted Tuesday when China announced that it would put prices of up to 15% on certain American agricultural products and impose punitive commercial measures on 15 American companies, including the Skydio drone manufacturer. He also added 10 other American companies to what she called a “list of unreliable entities”, preventing them from doing business in China.
The measures responded to the Trump administration’s taxation of an additional 10% rate on Chinese products on Tuesday. The administration accused China not to do enough to stem the flow of fentanyl and migrants in the United States.
“Beijing remains cautiously optimistic that he can make a truce with Trump so that the current trade war does not degenerate in new areas and potentially much more expensive,” said Jude Blanchette, director of Rand China Research Center. “At the same time, Beijing will dive with its quest for technological domination and an economy that lies in the pressure and coercion of the United States, given to what extent it is convinced of the endless hostility of America.”
But the trade war is only one of the fronts with which China is faced with the second presidency Trump. He also weighed his options because Mr. Trump imposes a dramatic reversal of American foreign policy, upsetting relations with American historic allies such as Canada, Mexico and Europe, and aligning with the long -standing rival of his country, Russia. China, in turn, courted Europe while intensifying diplomatic exchanges with Russia, Mr. Xi saying to President Vladimir V. Putin during a call last week that China and Russia were “real friends”.
At the same time, Beijing noted that the economic slump would not slow the country’s military spending. China’s military spending would increase by 7.2% in 2025, reaching the equivalent of approximately $ 246 billion, according to a budget report from the Ministry of Finance published at the meeting.
Last year, China’s military budget increased by 7.2%. The country has experienced an uninterrupted annual increase in military spending for decades, generally just over 7% in the past few years, while economic growth has slowed down.
The increase in military expenditure in China has funded an accumulation of advanced missiles, fighter planes, naval ships and submarines, including forces focused on Taiwan, the democratically governed island which resisted the affirmations of Sovereignty of Beijing. Recently, China has faltered its growing military scope by sending three warships to Seas near Australia and New Zealand, where they have practiced the dismissal of their artillery.
“An increase of 7% is a large number, because the base for her was already quite important,” said Lin Ying-Yu, a professor specializing in the Chinese army of the University of Tamkang in Taiwan. “What comes next, whether new aircraft carriers or space technology, etc., will actually cost it a little budget.”
Li You contributed the research of Beijing Amy Chang Dog Taipei, Taiwan’s contributed reports.
