Two Sessions & Lines in the Sand
China recently held its annual "Two Sessions" meeting, a pivotal event where thousands of political and community delegates from across mainland China, Hong Kong, and Macau convene in Beijing. This assembly is crucial for ratifying legislation, enacting personnel changes, and setting the budget. It's a highly choreographed display of unity and direction, designed to underscore the collective agenda of the Chinese leadership.
The term "Two Sessions" refers to the simultaneous annual meetings of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC). The CPPCC serves as an advisory body with limited political clout, yet it is known for its progressive proposals addressing social issues such as China's demographic challenges. Its members range from business magnates to cultural icons, previously including celebrities like Jackie Chan and Yao Ming. Conversely, the NPC, with its 3000 members, acts as the legislative body of the Chinese Communist Party, typically endorsing proposed legislation without opposition, earning it a reputation as a "rubber-stamp" parliament.
This year's sessions were particularly noteworthy amidst escalating economic pressures from U.S. President Donald Trump. In response, Beijing has articulated a clear, unwavering commitment to its developmental objectives and international rise, signaling that its trajectory will not be derailed by external forces.
A primary focus of the discussions was to bolster consumer demand to diminish reliance on exports for economic growth. This aligns with President Xi Jinping's vision to transform China into a technological powerhouse through increased investments and invigoration of the private sector.
Amidst this backdrop, China is bracing for a prolonged economic confrontation with the United States. Following Trump’s recent doubling of tariffs on all Chinese imports to 20% and hints at further restrictions, China remains resolute. A Foreign Ministry spokesperson emphatically stated that if the U.S. persists in escalating a trade war, China is prepared to respond decisively.
Throughout the week, the recurring theme was confidence, a sentiment repeatedly echoed by China's economic leaders during press briefings and prominently featured across state media. This notion of confidence as a cornerstone for national strength has permeated the discourse, although the prevailing mood among the Chinese public leans towards cautious optimism. Amid economic uncertainties, there is a tendency to save rather than spend, with many young people questioning whether their futures will surpass the achievements of their parents.
However, early 2025 has seen a burgeoning optimism, fueled by notable advancements from Chinese tech firms, challenging Western preconceptions and showcasing China's growing capabilities in sectors like artificial intelligence and green technology. Noteworthy achievements include the burgeoning success of electric vehicle manufacturer BYD, which is now competing robustly in global markets against giants like Tesla, affirming China's leadership in sustainable technology.
The cinematic triumph of "Ne Zha 2" and the strides in AI further exemplify China's technological stride. These successes are shaping global perceptions, suggesting that as America's influence wanes, China’s role on the world stage will only grow more significant and stable.
Yet, the reality remains complex. Deep-seated challenges in China's economic structure, particularly in the real estate sector, continue to pose significant hurdles. The government is yet to address how to balance property value enhancement with the vast oversupply of real estate.
Looking forward, Beijing is steering significant resources toward the high-tech transformation of its economy, pivotal to the government’s 2025 agenda and President Xi's long-term goals. This includes pushing the frontiers in AI, robotics, 6G, and quantum computing, supported by state-backed funds and an increasingly open stance towards foreign enterprise involvement.
As these developments unfold, the extent to which Trump’s policies will challenge China remains an open question. However, the U.S. still plays a crucial role in defining the bilateral relationship, with China ready to embrace competition as a testament to its enduring strength and resilience.
From Shanghai,
Alexander Glos