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China\u2019s top leaders sought to project confidence in the country\u2019s economy on Wednesday despite sluggish growth, an escalating trade war with the United States and growing geopolitical uncertainty caused by the Trump administration.<\/p>\n
The government will aim to expand China\u2019s economy by \u201caround 5 percent\u201d this year, said Premier Li Qiang, China\u2019s highest-ranking official after Xi Jinping, at the opening of the annual session of the country\u2019s rubber-stamp legislature.<\/p>\n
\u201cAchieving this year\u2019s targets will not be easy, and we must make arduous efforts to meet them,\u201d Mr. Li said, acknowledging that the economy faced many challenges. But he struck a positive note about the country\u2019s prospects, saying: \u201cThe underlying trend of long term economic growth has not changed and will not change. The giant ship of China\u2019s economy will continue to cleave the waves and sail steadily toward the future.\u201d<\/p>\n
The meeting in Beijing, called the National People\u2019s Congress, is a tightly scripted political pageant, showcasing how Mr. Xi plans to lead China through what he has often described as \u201cgreat changes unseen in a century\u201d around the world.<\/p>\n<\/div>\n<\/div>\n
That vision includes lifting China\u2019s technological prowess and self-reliance and beefing up its military capabilities so it can dominate the Asia-Pacific region. It is focused on strengthening the ruling Communist Party\u2019s grip on power by making national security a priority for all facets of Chinese society.<\/p>\n
Security at the legislative session, which brings around 3,000 delegates to the Great Hall of the People, is also a top priority. Uniformed and plainclothes police and soldiers were posted at several checkpoints on major roads near the venue and on pedestrian bridges, while entrances at nearby subway stations were temporarily closed.<\/p>\n
Mr. Xi and his top officials have been trying to restore faith in the economy, which has struggled to regain momentum after being battered by the pandemic and a housing market crash that wiped out much of the wealth of many middle-class Chinese. But reaching that target of around 5 percent growth will be even harder than in previous years because of a trade war with the United States that shows few signs of abating.<\/p>\n
Mr. Xi has held firm against Washington, signaling that China must be treated as an equal. He refused to bow to U.S. pressure like the leaders of Canada and Mexico did by engaging with Mr. Trump<\/a> after the American president first called for 25 percent tariffs on their countries in January. China has instead responded with retaliatory trade measures,<\/a> the latest of which were announced on Tuesday and targeted U.S. agricultural states that swung heavily for Mr. Trump in last year\u2019s election.<\/p>\n To help shore up growth, the government said it would raise its deficit to 4 percent of the overall economy\u2019s output. Such a significant policy shift signals China\u2019s readiness to increase public borrowing, money that can be used to stimulate the economy.<\/p>\n<\/div>\n<\/div>\n But more than that, China needs households to start spending again to turn its fortunes around. Consumer confidence has been hit badly by the crisis in the housing market. In an acknowledgment of this, Beijing lowered its target for consumer prices inflation to 2 percent, its lowest level in more than two decades.<\/p>\n China has not missed a growth target since 2020, when its economy shrank because of the Covid pandemic, though economists overseas have long debated the veracity of the country\u2019s economic data.<\/p>\n Under Mr. Xi, Beijing has emphasized the state sector\u2019s dominance in the economy and rattled entrepreneurs with crackdowns on private firms. But in recent months, Chinese leaders, including Mr. Xi himself, have been more willing to acknowledge the importance of private companies in fueling growth.<\/p>\n Last month, Mr. Xi held a rare meeting<\/a> with business leaders, including Jack Ma, the founder of the internet giant Alibaba, who had been sidelined for four years for criticizing Chinese regulators. Mr. Xi has extolled technology as a leading driver of development and a means for China to become less vulnerable to pressure from the United States.<\/p>\n Analysts say China is better prepared for Mr. Trump now than it was in his first term, showing a resolve to engage in tit-for-tat trade measures and increasing diplomatic engagement to counter U.S. pressure.<\/p>\n<\/div>\n<\/div>\n That was underscored on Tuesday when China announced that it would put tariffs of up to 15 percent on some U.S. agricultural products and impose punitive trade measures on 15 American companies, including the drone maker Skydio. It also added 10 other American companies to what it called an \u201cunreliable entities list,\u201d preventing them from doing business in China.<\/p>\n The moves were in response to the Trump administration\u2019s imposition of an additional 10 percent tariff on Chinese goods on Tuesday. The administration has accused China of not doing enough to stem the flow of fentanyl and migrants into the United States.<\/p>\n But the trade war is only one of the fronts in which China is confronting the second Trump presidency. It is also weighing its options as Mr. Trump imposes a dramatic reversal of American foreign policy. He has upended relations with historical U.S. allies like Canada, Mexico and Europe, seemingly turned his back on Ukraine and aligned himself with his country\u2019s longtime rival Russia, China\u2019s most important major partner on the global stage.<\/p>\n China, in turn, has been courting Europe while also stepping up diplomatic exchanges with Russia, with Mr. Xi telling President Vladimir V. Putin in a call last week that China and Russia were \u201ctrue friends.\u201d<\/p>\n At the same time, Beijing signaled that economic doldrums would not slow the country\u2019s military spending. China\u2019s military outlays would rise 7.2 percent in 2025, reaching the equivalent of about $246 billion, according to a Ministry of Finance budget report issued at the meeting.<\/p>\n<\/div>\n<\/div>\n Last year, China\u2019s military budget also grew by 7.2 percent<\/a>. The country has had an unbroken record of annual increases in military spending for decades, usually a little over 7 percent every year in the past few years, even as economic growth has slowed.<\/p>\n China\u2019s increases in military spending have funded a buildup of advanced missiles, fighter jets, naval ships and submarines, including forces focused on Taiwan, the democratically governed island that has resisted Beijing\u2019s claims of sovereignty over it. Recently, China flexed its growing military reach<\/a> by sending three warships to seas near Australia and New Zealand, where they practiced firing their artillery.<\/p>\n Mr. Li, the Chinese premier, indicated that the military budget this year would also focus on technological advances. \u201cWe will step up military training and combat readiness, speed up the development of new combat capabilities,\u201d he told the congress.<\/p>\n Li You contributed research from Beijing.<\/p>\n<\/div>\n<\/div>\n