In response to ongoing economic struggles and increased tariffs from the US, China has announced a goal to achieve approximately 5% economic growth this year. This decision comes as the nation commits significant financial resources to stimulate its economy, which is currently experiencing tension due to a trade conflict with the United States.
This announcement was made at the National People’s Congress (NPC), an annual event that largely functions to formalize decisions made by China’s leaders. The NPC, while often seen as a procedural assembly, garners significant attention as it offers insights into China’s policy direction.
At a time when China is contending with internal economic pressures such as low consumer spending, a real estate downturn, and high unemployment, the added strain of new US tariffs — now totaling 20% following an additional 10% imposed this month — further complicates matters. These tariffs impact one of the few thriving sectors of China’s economy: exports.
China promptly responded to the US’s tariff imposition by announcing retaliatory tariffs of 10%-15% on selected American agricultural imports, a significant move given China’s role as a major market for these products.
The economic meeting this week will likely focus on strategies to boost domestic growth in light of these challenges. Achieving the 5% growth target, a figure that was met last year thanks to robust export activity, will now depend more on stimulating domestic consumption, a persistent challenge for the government.
To this end, Beijing has introduced initiatives aimed at encouraging consumer spending, such as trade-in programs for various consumer goods. More such programs are anticipated, though their success in significantly boosting consumer spending remains uncertain.
Adding to the economic gloom are the lingering effects of strict COVID-19 restrictions and an extended crisis in the real estate sector. These factors, combined with a crackdown on tech and financial sectors, have dampened consumer confidence, making savings a priority over spending due to a weak social safety net.
Despite these challenges, Chinese officials remain positive about the country’s economic foundation. Liu Jieyi, a spokesman for the Chinese People’s Political Consultative Conference (CPPCC), emphasized the underlying stability and potential of China’s economy during a press briefing.
Furthermore, China continues to invest in high-tech industries such as artificial intelligence and renewable energies, aiming to reduce dependence on Western technology and foster “high-quality development.” This focus is part of a broader goal to position China as a leader in global technology.
However, the path forward is clouded by the US tariffs, which threaten to deter investment and undermine export and technology development initiatives. The ongoing tariffs, according to analysts, could significantly hinder China’s economic trajectory by affecting both export volumes and foreign investment.
[Original information sourced from BBC News]
