Chinese officials recently emphasized the importance of focusing on the country’s internal affairs amidst rising trade tensions. Han Wenxiu, deputy director at the Chinese Communist Party’s central committee office for financial and economic affairs, highlighted three key areas of focus. These include the stable and healthy development of the real estate market, accelerated development of “emerging and future industries,” and expanding domestic demand, particularly consumption. Han’s emphasis on these areas reflects the government’s strategy to ensure the national economy runs smoothly and steadily moves forward.
Response to Increased Trade Tensions
In response to questions about how China plans to support growth amid escalating trade tensions, Han reiterated Chinese President Xi Jinping’s call to “do your own thing well” and focus on internal affairs. This approach is seen as a way to insulate the country from external uncertainties while deepening reform and further opening up the economy. Despite external pressures, Chinese officials remain committed to achieving full-year economic targets and boosting domestic tech industries.
Trade tensions between the U.S. and China have intensified in recent years, with former President Donald Trump threatening significant tariffs on Chinese goods. The Biden administration has continued this trend by increasing tariffs on Chinese electric cars, while the European Union also announced plans to raise tariffs on Chinese-made electric vehicles. The uncertainty caused by these tensions has led to a temporary dip in foreign direct investment, prompting Chinese officials to reiterate their commitment to reform and opening up.
Despite facing challenges such as a real estate slump and lackluster consumption, China remains focused on driving economic growth. Han acknowledged the systemic impact of the real estate sector on the economy and outlined plans to address these challenges. These include working on absorbing existing housing inventory, optimizing new construction, and delivering pre-sold homes. Additionally, there is a call for stronger and more effective macroeconomic policies to support economic growth.
China’s longer-term strategy involves building up advanced technology to offset the slowdown in certain sectors of the economy. Over the past 40 years, China has gradually opened up its economy to foreign and private capital through policies of reform and opening up. However, as the country’s growth has slowed in recent years, there is a need for more stimulus to meet annual growth targets. While exports have been a driving force of growth, efforts to build advanced technology have yet to fully offset challenges in other sectors.
As China continues to navigate trade tensions and internal challenges, officials are focused on improving the macroeconomic governance system and integrating the development of urban and rural areas. The recent Third Plenum meeting outlined plans to address these issues and ensure effective implementation. Han emphasized the importance of these plans and the need for a proactive approach to strengthen the economy. Despite external uncertainties, China remains committed to deepening reform and further opening up to drive long-term growth.
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