US President Donald Trump has doubled tariffs on Chinese imports to 20%, prompting Beijing to retaliate with up to 15% tariffs on selected American goods and expand export controls to a dozen US firms. Chinese leader Xi Jinping is preparing for a major political gathering, known as the “two sessions,” which will showcase China’s tech prowess and global rise.
China has vowed to fight back against what it sees as unfair trade practices by the US. The country’s economy has been struggling with a property sector crisis, high local government debt, and low foreign investment. Despite this, Xi Jinping is expected to release policies to support industries hit by US tariffs, including subsidies for key companies.
The two sessions gathering will also highlight Xi’s tight grip over China’s political system, which has been increasingly centralizing power since 2018. Analysts say the event will demonstrate how united the political apparatus is around his vision for the future, despite economic challenges.
China’s slowdown in growth has been attributed to a property sector crisis and high local government debt. However, the country is expected to report GDP growth of around 5% this year, according to analysts. Beijing may unveil new efforts to boost consumer spending through stimulus or social welfare benefits in the coming days.
The escalation of US-China trade tensions has created more friction with the rest of the world. China’s reliance on exports as an agent of growth propelled it to a nearly $1 trillion trade surplus last year, driving Trump’s tariff push. However, Beijing is confident in its ability to weather these challenges and remain a champion of global trade and order.
China’s “Private Economy Promotion Law” could be passed soon, seen as a significant course correction following a years-long regulatory crackdown on private industry. This law aims to improve market access for private firms, signaling a shift towards supporting entrepreneurship and innovation.
The country’s entrepreneurs are expected to play a key role in advancing innovation, with Xi Jinping hosting top tech executives in Beijing last month. The government has sent a strong signal that it needs its entrepreneurs to step up in the fight against US tariffs.
As China “doubles down” on its approach, deepening the role of the party and core leader Xi Jinping to steer this process is more important than ever for leadership analysts say.
Source: https://edition.cnn.com/2025/03/03/china/china-two-sessions-xi-stability-trump-intl-hnk/index.html