As President Donald Trump intensified economic pressure on China over the past week, Beijing responded with a clear message: its ascent will not be hindered.
The ongoing major political meeting in the capital provided an opportune moment for Beijing to articulate its stance. The “two sessions” event, which includes China’s legislative body and its top advisory group, serves as a platform for the government to unveil its strategies and set the agenda for the upcoming year.
At the forefront of its agenda is the enhancement of consumer demand, aimed at reducing reliance on exports to sustain its expansive yet decelerating economy. Following this, the government is focused on advancing President Xi Jinping’s vision of establishing China as a technological powerhouse through increased investment and collaboration with the private sector.
These initiatives come as Beijing braces for a potentially extended economic confrontation with the United States. Trump announced a doubling of tariffs on all Chinese imports to 20% on Tuesday and has indicated that further measures, including stricter regulations on American investments in China, may follow.
“We can overcome any challenges in our pursuit of development,” stated Li Qiang, China’s second-highest official, addressing thousands of delegates at the National People’s Congress in Beijing’s Great Hall of the People. He emphasized that the “giant ship of China’s economy” will “sail steadily toward the future.”
A spokesperson for the foreign ministry was more forthright regarding trade tensions on Tuesday, asserting, “If the US insists on engaging in a tariff war, trade war, or any other form of conflict, China will fight to the end,” as he addressed reporters.
Beijing’s current priorities and rhetoric may resemble those of previous years, but they now emanate from a nation that is beginning to regain its confidence after enduring the impacts of stringent Covid restrictions, a crisis in the property sector, and a technological rivalry with the United States.
The concept of “confidence” has emerged as a recurring theme throughout the weeklong event, which concludes on Tuesday. It was mentioned nearly a dozen times during a press conference led by China’s economic leaders on Thursday, prominently featured in state media reports, and highlighted in a significant reminder during Li’s nationally televised address: “confidence builds strength.”
However, this optimism may be more of a hopeful vision than a tangible reality. Many individuals in China are facing an uncertain future, preferring to save rather than spend. Young people, in particular, are grappling with job scarcity and questioning whether their prospects will surpass those of their parents.
In contrast to last year, the nation is approaching 2025 with renewed momentum, driven by the achievements of its firms and advancements in technology. While the potential return of Trump raises concerns about economic challenges for Beijing, it also presents opportunities for China’s ascent.
“By the conclusion of Trump’s second term, America’s global standing and credibility will have diminished,” stated People’s Liberation Army Senior Colonel (ret) Zhou Bo, a senior fellow at Tsinghua University’s Center for International Security and Strategy, in an interview with CNN. “As American influence wanes, China will naturally appear more significant.”
Confidence Surge
This sentiment is not confined to the corridors of power.
In the capital’s streets, sleek domestically produced electric vehicles navigate through traffic, including models from BYD, which is now competing directly with Tesla for global market share—highlighting China’s successful initiative to establish itself as a frontrunner in green technology.
Additionally, the animated film “Ne Zha 2” has shattered box office records, while the privately owned Chinese AI company DeepSeek has emerged as a significant player, surprising Silicon Valley and challenging Western beliefs regarding the expenses tied to AI development.
In Beijing this week, the phrase “you can ask DeepSeek” has become a lighthearted yet proud reference in everyday discussions.
“Last year, many were influenced by the US narrative suggesting that China is in decline, that we have reached our peak,” remarked Wang Yiwei, director of the Institute of International Affairs at Renmin University in Beijing. “We certainly face numerous challenges and issues, but it is incorrect to claim that we have reached peak China.”
Even former President Trump’s emphasis on economic competition with Beijing, as he implements tariffs on US trading partners, is viewed by some as indicative of China’s progress. On a recent afternoon in downtown Beijing, several individuals interviewed by CNN cited competition with the US as evidence of their nation’s increasing strength.
“China is advancing rapidly, which has drawn international attention, particularly from the United States,” noted a medical graduate student named Xia. “Trump’s tariff increases signify competition… and without competition, perhaps China’s independent development would not be sustainable.”
High-stakes competition
Despite efforts by Chinese officials to convey a sense of confidence, international analysts suggest that the economic stimulus measures introduced this week indicate that Beijing is preparing for significant challenges ahead.
In his opening remarks, Premier Li acknowledged this reality, stating, “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.”
China is keen to avoid navigating this volatility while simultaneously addressing a sluggish domestic economy. This is one of the reasons behind its push to enhance consumption and stimulate growth, with an ambitious target of “around 5%” expansion for the year. Additionally, Beijing recognizes that ongoing trade tensions necessitate a reduced reliance on exports for economic stability.
Bert Hofman, a professor at the East Asian Institute at the National University of Singapore and former World Bank country director for China, noted, “It is likely that Beijing has considered the possibilities of Trade War 2.0, but it is evident that China’s growth will increasingly depend on domestic demand.”
However, some analysts argue that the initiatives put forth by Beijing lack sufficient detail and are less aggressive than what is required to invigorate the economy and enhance consumer confidence.
Michael Hirson, a fellow at the Asia Society Policy Institute’s Center for China Analysis, remarked, “This reflects a leadership intent to refocus on growth and development, yet there remains a tendency to implement only the necessary measures in terms of stimulus to achieve that goal.”
Xi may be navigating the dual objectives of maintaining strategic resources to bolster the economy while preparing for potential challenges posed by a difficult four years under Donald Trump.
Additionally, Beijing aims to allocate resources towards the high-tech transformation of its economy and industries, which is a crucial element of the government’s 2025 agenda and a long-term vision for Xi, who, unlike U.S. presidents, is not constrained by term limits.
The Chinese government is actively promoting advancements in artificial intelligence, robotics, 6G technology, and quantum computing. It has announced a state-supported fund to foster technological innovation and has even adopted a more welcoming stance towards foreign companies, marking a notable shift in Xi’s approach.
China continues to feel the impact of the previous Trump administration’s efforts to exclude its tech leader, Huawei, from global mobile networks, as well as the Biden administration’s initiatives to persuade allies to restrict Chinese access to advanced semiconductor technology.
Recently, Washington indicated it might broaden restrictions on U.S. investments in sensitive technologies within China.
Despite these challenges, Beijing has expressed confidence in its ability to progress regardless of external obstacles.
“Whether in space science or semiconductor manufacturing, unjustified external pressures have never hindered our progress,” Chinese Foreign Minister Wang Yi stated to reporters on Friday. “Where there is a blockade, there is a breakthrough; where there is suppression, there is innovation.”
“We are witnessing an ever-expanding horizon for China to emerge as a leader in science and technology,” he added.
The Trump Challenge?
The extent to which Trump’s policies will confront China remains a pressing and unresolved issue for Beijing.
Thus far, the US president has not implemented the sweeping tariffs of 60% or more on Chinese imports that he had previously threatened during his campaign.
His attention has been directed elsewhere, particularly towards enacting significant changes in US global leadership by drastically reducing foreign aid, asserting control over other nations’ sovereign territories, and disrupting US alliances in Europe, while fostering closer ties with Russia at the expense of Ukraine.
This shift presents potential challenges for Beijing. For instance, a warming of relations between Washington and Moscow could distance Xi from his closest ally, Russian President Vladimir Putin, or a reduction in American security commitments in Europe might lead to increased focus on Asia.
Conversely, Chinese diplomats have leveraged these changes to position their nation as a responsible and stable global leader, despite ongoing criticisms of Beijing’s assertive actions in Asia.
“A major nation should respect its international commitments and fulfill its responsibilities. It should prioritize principles over self-interest and refrain from using its power to intimidate the vulnerable,” stated Foreign Minister Wang Yi in response to a CNN inquiry regarding Trump’s “America First” policy. Wang further emphasized that China “firmly opposes power politics and hegemony.”
In terms of tariffs, analysts suggest that Beijing is attempting to temper its reaction, hoping for a possible meeting between Xi and Trump or even a resolution that could prevent a worsening trade conflict.
Although China swiftly responded to two rounds of US tariffs this year, including imposing duties on US energy and essential agricultural products, its counteractions have been relatively restrained.
Given the trade deficit with the US, China has limited options for retaliation if tensions escalate, but it is anticipated that Beijing will consider alternative strategies, such as export controls, to gain leverage.
Some observers believe that while tariffs may inflict short-term difficulties on the Chinese economy, the long-term consequences will be more detrimental to the US. China remains a crucial component of global supply chains and is better equipped to endure this trade conflict compared to the previous one, as it now exports to a broader range of markets, according to data.
Zhou, a Beijing-based expert and author of the upcoming book “Should the World Fear China?”, noted, “When imposing tariffs against a peer competitor, the effectiveness is diminished compared to targeting smaller nations or medium powers.”
He emphasized that China seeks collaboration rather than conflict. However, he acknowledged that since the US holds a stronger position in this dynamic, it will ultimately dictate the nature of the relationship. Consequently, he stated, “If this must evolve into a competition, then we must be prepared to engage in that fight.”
