“Up until now, the Chinese economy has always grown amidst storms and trials, becoming stronger through tests. We have sufficient confidence in the outlook for the Chinese economy.” (Liu Qinjian, Spokesperson for the National People's Congress (NPC))
The annual Two Sessions (the National People's Congress and the Chinese People's Political Consultative Conference) opened on the 4th amid tariff pressure from U.S. President Donald Trump. On this day, China imposed tariffs on certain U.S. imports and sanctioned U.S. corporations, marking a counterattack. At the same time, it expressed confidence that the Chinese economy would grow steadily. Amid forecasts that it would be difficult for China to maintain growth rates in the 5% range this year due to the repercussions of U.S.-China trade tensions, attention is drawn to how China will navigate through these obstacles.
◇ Two Sessions open under U.S. tariff pressure… China retaliates while ‘moderating its stance’
On this day, China's State Council Tariff Policy Committee announced that starting on the 10th, it would raise tariffs by 15% on 29 items including U.S. chicken, wheat, corn, and cotton, and increase tariffs by 10% on 711 items including corn, soybeans, pork, beef, seafood, fruits, vegetables, and dairy products. China's Ministry of Commerce also listed 10 U.S. defense corporations and 15 other companies as 'unreliable corporations' and added them to the export control list for dual-use goods (items used for both civilian and military purposes). This follows the U.S. implementing a cumulative 20% tariff increase on all Chinese imports from this day.
When the State Council and the Ministry of Commerce announced these measures, preparations for the Chinese People's Political Consultative Conference were underway at the Great Hall of the People in Beijing, along with a pre-press conference for the NPC, which is set to officially open on the 5th. Spokesperson Liu noted regarding the response policy to U.S. tariffs, "We hope that the U.S. side will cooperate with the Chinese side and find solutions through equal negotiations, and while there may be differences of opinion between the two major countries with different national conditions, respecting each other's core interests and major concerns and finding appropriate ways to resolve issues is key."
Although it appears that China has lowered the intensity of its retaliatory measures against the U.S., there's no denying that the U.S.-China trade war is escalating. This is considered the greatest risk factor that could destabilize the struggling Chinese economy due to domestic downturns. China is expected to announce an economic growth target of around 5% during the NPC opening ceremony on the 5th. However, the World Bank (WB) has already projected that China's growth will be limited to 4.5% this year, prompting discussions about aggressive target setting.
Bloomberg reported, "Overall, China's response measures are at a very minimal level, and this movement is calibrated to show that while not delivering a significant blow to the Chinese economy, it has the ability to disrupt the supply of key minerals to Trump and cause damage to U.S. corporations."
◇ “Shifting growth momentum”… AI likely to offset trade conflict impact
China acknowledges that this year's growth environment is not easy. On this day, Spokesperson Liu stated, "It cannot be denied that negative impacts from the external environment have deepened and the economy still faces many difficulties and challenges." He added, "From the external perspective, global economic and political uncertainties are increasing, and it is becoming more difficult to stabilize external demand," and "Internally, due to insufficient domestic demand, some corporations are struggling with production and operations." This contrasts with the previous year's Two Sessions, which had a consistent focus on the positive aspects of the Chinese economy, known as the 'bright theory.'
Despite this, confidence was expressed that the fundamental strength of the Chinese economy remains sturdy. Spokesperson Liu said, "The foundation of the Chinese economy is stable, with many advantages; its resilience is strong, and its potential is significant." He also emphasized that "the NPC and the Standing Committee of the Communist Party will implement decisions and allocations by the Central Committee of the Party and provide legal guarantees for promoting high-quality development and high-level opening through legislation and supervision."
Attention is drawn to how the Chinese leadership will promise growth and calm the repercussions of the U.S.-China trade war through economic stimulus measures during the Two Sessions period. The market anticipates support measures for private corporations led by advanced technologies such as artificial intelligence (AI) and robotics. Spokesperson Liu remarked, "China is at a crucial stage where growth momentum is shifting, and the growth of new momentum adds more possibilities to expand new spaces and create new opportunities," hinting that more would be revealed during the Two Sessions.
이에 이번 양회 기간 중국 지도부가 어떤 경기 부양책을 통해 미중 무역 전쟁의 여파를 잠재우고 성장을 약속할지 주목된다. 시장에서는 인공지능(AI)과 로봇 등 첨단기술을 앞세운 민영 기업에 대한 지원책이 나올 것으로 본다. 실제 러우 대변인은 “중국은 성장 모멘텀이 전환되는 중요한 시기에 있다”며 “새로운 모멘텀의 성장은 새로운 공간을 확장하고, 새로운 기회를 창출할 수 있는 더 많은 가능성을 추가했다”며 양회 기간 중 공개하겠다고 귀띔했다.