Beijing, China
UJ
—
As President Donald Trump increased economic pressure on China recently, Beijing responded assertively: its ascent won’t be hindered.
A significant political meeting taking place in the capital provided a fitting backdrop for Beijing’s rebuttal. The “two sessions” of China’s ceremonial legislature and its key advisory body is where the administration outlines its agenda and establishes the direction for the upcoming year.
What tops their agenda? Stimulating consumer demand to ensure China can grow without depending solely on exports, and secondly, to advance Xi Jinping’s ambition of transforming China into a tech superpower by increasing investment and involving the private sector.
These actions from Beijing come as it prepares for what might be a prolonged economic confrontation with the United States. Trump raised tariffs on all Chinese imports to 20% on Tuesday and has hinted at imposing further tariffs along with stricter rules on American investments in China.
“We can overcome any challenge in our development pursuits,” stated Li Qiang, China’s second-ranking official, to thousands gathered in the Great Hall of the People during the National People’s Congress on Wednesday. He affirmed that the “giant ship of China’s economy” will “sail steadily into the future.”
A foreign ministry spokesperson was more explicit when addressing trade tensions on Tuesday: “If the US continues to wage a tariff and trade war, China will fight to the end,” he warned reporters.
While Beijing’s emphasis and rhetoric might resemble past years, they now emanate from a nation that is regaining its confidence after facing challenges such as strict Covid measures, a crisis in the property sector, and escalating tension with the US in technology.
“Confidence” has been a recurring theme during this weeklong event, which concludes Tuesday. It was mentioned numerous times during a press conference by China’s economic leaders on Thursday, highlighted throughout media reports, and was emphasized in Li’s closing speech stressing that “confidence builds strength.”
Yet, there is an underlying skepticism about this optimism. Many citizens confront a future filled with uncertainty, choosing to save rather than spend, with youth faced with job scarcity and doubts about their prospects compared to their parents.
Unlike last year, China now approaches 2025 with optimism fueled by the achievements of local enterprises and advancements in technology. Although Trump’s return raises concerns about economic challenges, opportunities for China’s growth also seem to emerge.
“By the end of Trump’s tenure, America’s global image and credibility will deteriorate,” said People’s Liberation Army Senior Colonel (ret) Zhou Bo, a senior fellow at Tsinghua University’s Center for International Security and Strategy in Beijing, in an interview with UJ. “And as American power wanes, China will inevitably gain importance.”
This confidence is not limited to government circles.
In the capital, modern, domestically-produced electric vehicles navigate the streets, including models from BYD, which competes directly with Elon Musk’s Tesla in global sales — showcasing China’s push to take the lead in green technology.
Additionally, the animated film “Ne Zha 2” broke box office records, and the privately-owned AI company DeepSeek gained significant traction, overturning Western views about the cost-effectiveness of AI.
In Beijing this week, the phrase “you can ask DeepSeek” has become a humorous and proud catchphrase.
“Last year, people were perhaps influenced by the US narrative of China being in decline, that China has peaked,” noted Wang Yiwei, director of the Institute of International Affairs at Renmin University in Beijing. “We still face numerous challenges and obstacles, but it’s not about reaching ‘peak China.’”
Trump’s emphasis on economic rivalry with Beijing, alongside his tariff actions against US trade partners, is seen by some as evidence of China’s progress. On a recent weekday afternoon in downtown Beijing, several pedestrians expressed their views to UJ, indicating that competition with the US illustrates their nation’s rising strength.
“China is rapidly developing, which has drawn international attention, particularly from the United States,” remarked a medical graduate student named Xia. “Trump’s increased tariffs signal competition… and if there’s no competition, possibly China’s independent development may not be sustainable.”
Despite China’s officials projecting confidence, international analysts suggest that the economic stimulus measures disclosed this week indicate that Beijing braces for significant challenges ahead.
Premier Li hinted at this in his opening speech. “The external situation is turning increasingly complicated and severe, which could significantly affect the nation’s trade, technology, and other sectors,” he remarked.
Beijing is keen to mitigate the impact of instability while facing a sluggish domestic economy. This grows their intention to spur consumption and promote growth, as they set an ambitious target of “around 5%” for this year. Furthermore, trade tensions motivate China to become less reliant on exports.
“It appears Beijing has anticipated the scenarios of Trade War 2.0; however, it is evident that China’s growth will increasingly depend on domestic demand,” stated Bert Hofman, a professor at the East Asian Institute at the National University of Singapore and a former World Bank country director for China, in a written analysis.
Still, some experts assert that Beijing’s initiatives lack specificity and are far less robust than necessary to stimulate the economy and enhance consumer confidence.
“This indicates a leadership inclination to shift focus back toward growth and development while simultaneously adopting a strategy to execute only as much stimulus as necessary to achieve those objectives,” remarked Michael Hirson, a fellow at the Asia Society Policy Institute’s Center for China Analysis.
Xi may also be trying to manage this goal while reserving some capacity to support the economy if China faces “a difficult four years dealing with Donald Trump,” he added.
Meanwhile, Beijing aims to channel resources into the high-tech transformation of its economy and industries. This is a key aspect of the government’s 2025 blueprint and a long-term objective for Xi, who, unlike US presidents, is not restricted by term limits.
The government is advocating for innovations in AI, robotics, 6G, and quantum computing, creating a state-backed fund to foster technological innovation and even encouraging foreign companies to participate — a noticeable shift in Xi’s stance.
China still feels the sting from the Trump administration’s efforts to isolate its tech leader Huawei from global mobile networks and from the Biden administration’s push to persuade allies to restrict China’s access to advanced semiconductors.
Last month, the US indicated it was contemplating broadening restrictions on American investments in sensitive technologies in China.
Nevertheless, this week Beijing has also stressed its resolve to progress irrespective of obstacles.
“In fields like space science and chip production, unjustified external pressure has never held us back,” Chinese Foreign Minister Wang Yi conveyed to reporters on Friday. “Where there are blockades, there are breakthroughs; where there is suppression, there is innovation.”
“We are witnessing an expanding horizon for China to emerge as a science and technology powerhouse,” he added.
The extent to which Trump’s policies will challenge China is a crucial and ongoing concern for Beijing.
So far, the US president has held back from imposing the blanket 60% or more tariffs on Chinese imports that he had suggested during his campaign.
His attention has been on other matters, including implementing sweeping changes to US leadership globally by dramatically reducing foreign aid, threatening to take control over other nations’ territories, and disrupting alliances in Europe, all while fostering closer ties with Russia at the expense of Ukraine.
This upheaval poses potential risks for Beijing, such as if a reconciliation between Washington and Moscow distances Xi from Russian President Vladimir Putin, his closest partner, or if a less secure Europe prompts increased American focus on Asia.
However, Chinese diplomats have been utilizing the shifts to project their nation as a responsible and stable global leader, notwithstanding critiques of Beijing’s own assertive behaviors in Asia.
“A global power should respect its international responsibilities and fulfill its obligations. It must not prioritize self-interest over principles, nor should it use force to intimidate weaker nations,” Foreign Minister Wang Yi stated in response to UJ’s inquiry about Trump’s “America First” policy. Wang added that China “firmly opposes power politics and hegemony.”
In terms of tariffs, analysts suggest that Beijing is aiming for a balanced response, possibly awaiting a meeting between Xi and Trump or an agreement to prevent escalating trade conflict.
While China responded quickly to two sets of US tariffs this year — including tariffs on US energy and essential agricultural products — it has maintained a measured approach to its counteractions.
With China’s trade deficit with the US, it has limited capacity to retaliate if a trade conflict intensifies, but it is anticipated that Beijing may consider alternative strategies like export controls for leverage.
Nonetheless, some individuals believe that even if tariffs result in short-term strain on the Chinese economy, the long-term impact will favor the US. China remains a critical component of global supply chains and is now better positioned to weather trade disputes than before, as it exports to a broader array of markets globally, data indicates.
“When imposing tariffs against a peer competitor, their effectiveness diminishes compared to targeting smaller nations or mid-level powers,” commented Zhou in Beijing, who is also authoring the upcoming book “Should the World Fear China?”.
China desires collaboration, not conflict.
“However, because the US still holds the upper hand in this bilateral relationship, it largely determines its nature… hence, China must be prepared to compete if it comes down to it,” he concluded.
