Earth Science News
TRADE WARS
China's leaders gather to hash out Trump tariff battle plans
China's leaders gather to hash out Trump tariff battle plans
By Peter Catterall and Oliver Hotham
Beijing (AFP) Feb 28, 2025

China's leadership convenes next week for closed-door meetings to hammer out plans to shield the ailing economy from tariffs and trade threats from US President Donald Trump.

The "Two Sessions" gatherings of the country's parliament and top advisory body are primarily talking shops, rubber-stamping decisions made by the Communist Party while giving a veneer of openness and accountability.

But they do offer a rare glimpse into the leadership's priorities and concerns while facing an unpredictable United States -- China's largest trading partner and strategic rival.

Ahead of the meeting, Chinese President Xi Jinping admitted the country's economy was facing "numerous difficulties", writing in an article set to be published this week in ruling Communist Party journal Qiushi, state media said.

But Xi also stressed "the conditions supporting long-term growth and the overall positive trajectory have not changed".

All eyes will be on Wednesday's opening of the National People's Congress parliament, where Premier Li Qiang will lay out economic growth goals for 2025, offering insights into just how optimistic Beijing is about the year ahead, as well as new military spending.

Analysts polled by AFP broadly agreed that Beijing will set a goal of around five percent growth -- the same as 2024.

Many see that as an ambitious objective given the headwinds China is battling, and Beijing's continued reluctance to inject the economy with the kind of large-scale stimulus observers say it needs.

"From the faltering property market to weak household spending, elevated youth unemployment and tariffs, the economy is having a tough time," Harry Murphy Cruise, head of China and Australia economics at Moody's Analytics, told AFP.

"Any one of those challenges would be a headache for officials; combined, they are a migraine."

- More unpredictable -

Likely top of the agenda is Trump, who in just over a month back in the White House has overturned the international order and proven even more unpredictable than in his first term.

The US president imposed additional 10 percent duties on products imported from China last month and has threatened more.

The move could affect hundreds of billions of dollars in trade and may worsen if the Republican follows through on his threats of even higher customs levies.

A US-led push to squeeze China out of international supply chains for high-tech chips and other sensitive technology -- spearheaded by the previous administration of Democrat Joe Biden -- is also expected to ramp up.

That effort has driven Beijing's policy of technological self-reliance, part of a broader initiative by China's leadership to develop "new quality productive forces" that it hopes can boost growth.

Last May, Beijing poured more than $47 billion into the country's largest-ever chip investment fund -- the third phase of an effort that outpaced the first two phases combined.

"Beijing is betting that a massive party-led push for research, innovation, commercialisation, manufacturing and digitalisation can create new economic growth drivers," analysts Neil Thomas and Jing Qian at the Asia Society said in a note.

China hopes it can "replace the real estate sector and generate productivity gains that help mitigate issues related to debt, demographics and dependence on the West", they added.

Analysts also said pressure from Trump could encourage Beijing to step up the kinds of support for the economy seen last year -- interest rate cuts, easing local government debt pressure and expanding subsidy programmes for household goods.

"We expect China to increase policy support in response to greater external shock from the US," Wang Tao, chief China economist at UBS, told AFP.

And more "will be rolled out later in the year... should there be additional significant tariffs or other external shocks, or should the property downturn turn worse", she added.

- Property crisis -

Another key issue is weak domestic consumption.

Demand has been a long-running drag on the world's second-largest economy, fuelling a deflationary spiral that has kept prices stubbornly low.

Analysts expect policymakers to broaden the scope of a consumer goods trade-in programme initiated last year that allows shoppers to exchange older home appliances and other items.

That, said Louise Loo of Oxford Economics, "could have an immediate, albeit temporary, impact on retail spending".

But they warn much deeper issues are driving a crisis of confidence in the economy, which long enjoyed double-digit growth but has languished since the pandemic.

The continued crisis in China's vast property sector -- once a key driver of growth but now beset with sprawling debt -- has become emblematic of that malaise.

Last month, new home prices in China's most developed "first-tier" cities fell 3.4 percent year-on-year, according to the National Bureau of Statistics.

The slide was even more pronounced in second-tier cities, where new home prices dropped five percent on-year in January, and in third-tier cities where prices fell six percent, the data showed.

"Our prognosis of China's problems continues to lie in housing," Oxford Economics' Loo said, pointing to the impact the crisis was having on everything from local government finances to consumer demand.

"Overcoming these powerful negative feedback loops in the economy this year would be policymakers' key task."

pfc-oho/sco

UBS Group

Related Links
Global Trade News

Subscribe Free To Our Daily Newsletters
Tweet

RELATED CONTENT
The following news reports may link to other Space Media Network websites.
TRADE WARS
Panama AG agrees Hong Kong firm's canal concession is 'unconstitutional'
Panama City (AFP) Feb 27, 2025
Panama's attorney general said Wednesday that concession granted to a Hong Kong-based firm to operate ports on either end of the Panama Canal should be scrapped for being "unconstitutional." The contract held by CK Hutchison Holdings, owned by Hong Kong billionaire Li Ka-shing, has been at the root of US President Donald Trump's concerns for Chinese influence over the waterway. The Panama Ports Company, a subsidiary of CK Hutchison, manages two of the canal's five ports, an arrangement in place ... read more

TRADE WARS
Anger as German conservatives question NGO funding

Pentagon chief visits Guantanamo as US pushes to deport migrants

Two jailed for 18 years over tower block collapse in Turkey quake

UN watchdog chief visits Fukushima as Japan returns to nuclear power

TRADE WARS
China to build longest bridge in Central Asia

Metal Produced in Space Returns to Earth for Testing

Indonesian nickel producer to build $1.8 bn plant

Ukraine, US agree to terms of minerals, reconstruction deal

TRADE WARS
Climate crisis revives Soviet hydro plan in Central Asia

Harnessing Fog for Water Supply in the World's Driest Regions

Nauru sells citizenship to fund climate change mitigation

Vanuatu climate minister frets over US climate reversal

TRADE WARS
Study reveals how Earth's orbit controls ice ages

Giant ice sheets shaped Earth's evolution by altering ocean chemistry

'All eyes on Arctic': Canada boosts its northern force

'All eyes on Arctic': Canada boosts its northern force

TRADE WARS
Cognac on the rocks: industry seeks French govt help from Chinese tariffs

EU eyes stricter food import rules in agriculture policy review

Bordeaux wine harvest drops to lowest level since 1991

Pesticides causing widespread harm to animals and plants: study

TRADE WARS
Court overturns New Zealand White Island eruption conviction

La Reunion residents ordered indoors as 'purple alert' cyclone nears

How did this man's brain turn to glass? Scientists have a theory

Indonesia residents run outside as shallow quake hits

TRADE WARS
UN requests $2.5 billion for DRC humanitarian plan

S.Africa repatriates more than 120 soldiers from DR Congo

In Somalia, 4.4 million people risk hunger by June: report

Wounded South African soldiers return home from DR Congo

TRADE WARS
Pentagon orders removal of pro-diversity online content

The quest to extend human life is both fascinating and fraught with moral peril

New play takes on OpenAI drama and AI's existential questions

Trump signs order to get 'transgender ideology' out of military

Subscribe Free To Our Daily Newsletters




The content herein, unless otherwise known to be public domain, are Copyright 1995-2024 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. General Data Protection Regulation (GDPR) Statement Our advertisers use various cookies and the like to deliver the best ad banner available at one time. All network advertising suppliers have GDPR policies (Legitimate Interest) that conform with EU regulations for data collection. By using our websites you consent to cookie based advertising. If you do not agree with this then you must stop using the websites from May 25, 2018. Privacy Statement. Additional information can be found here at About Us.