Beijing: US President Donald Trump’s tariff threats, along with firm policies to contain China and the economic slowdown, are expected to dominate the annual session of the Chinese parliament beginning here on Tuesday.
Over 5,000 delegates from the National People’s Congress (NPC) and the advisory body, the Chinese People’s Political Consultative Conference (CPPCC), will meet to begin their about two week-long sessions to deliberate on a host of agenda and legislations finalised by the ruling Communist Party China (CPC) to steer the country for this year.
The NPC, which is called the rubber stamp legislature for its routine endorsement of the policies of the CPC, is the main policy body, while the national advisory body – the CPPCC – comprising representatives from various walks of Chinese society deliberate and forward recommendations to improve the governance.
The NPC will open its session on Wednesday with the submission of the work report and the budget by Premier Li Qiang outlining China’s achievement last year, including the accomplishment of the official target of five per cent of GDP, amid the slump of the property market causing billions of dollars of losses and expanding the dormant domestic demand.
The twin sessions at the Great Hall of People overlooking the sprawling Tiananmen Square will open this year with Trump’s tariff threat on China’s exports of USD 436 billion to the US, which already declined from USD 547 billion in 2018.
Trump said his 10 per cent new tariffs on goods from China will come into force on Tuesday, the day the NPC session begins.
Chinese goods were already hit by 10 per cent tariffs by Trump after he assumed his second tenure.
During his election campaign, Trump threatened to slap 60 per cent tariffs on Chinese goods to address US concerns over fentanyl, a potent opioid drug blamed for widespread drug addiction in the US.
While China is retaliating with equal measure, the escalating tariff conflict was expected to drag down the foreign trade-dependent Chinese economy, which is struggling to achieve the five per cent GDP target as it is weighed down by stagnating domestic consumption.
Besides the US, the European Union, which is another major export market, has escalated tariffs on Chinese e-vehicles and batteries on which Beijing is banking on reviving its foreign trade.
The focus of Li’s work report will also reveal the likely increase in the defence budget of China, which is the second largest spender on defence after the US.
Last year, China increased its defence budget by 7.2 per cent to about USD 232 billion (1.67 trillion yuan) over three times that of India as it continues with the massive modernisation of its military.
The defence budget figures are viewed with scepticism in light of massive military modernisation, including the aircraft carriers, building of naval ships and modern stealth aircraft being carried out at a feverish pitch by the Chinese military.
Speculation is rife that Beijing may increase its defence spending this year too, amid Trump’s assertion to further ramp up the US military.
Besides the tariff war, China is bracing to face strategic competition with the US under Trump, especially over Taiwan, the South China Sea and the Indo-Pacific.
Also, there is lingering concern here over the emerging rapprochement between Trump and Russian President Vladimir Putin over ending the Ukraine war.
President Xi Jinping shared a close alliance with Putin built over the years to ward off threats from the US and its allies.
Putin dispatched his top security official Sergei Shoigu on March 1 to brief Xi about Moscow’s current talks with Washington to end the Ukraine war.
In his talk with Shoigu, Xi underlined the need to carry on the core spirit governing China-Russia relations in the new era featuring lasting good-neighbourliness, comprehensive strategic coordination, and mutually beneficial cooperation for win-win results.
Ahead of the parliament session, a report here warned that China’s wealthiest individuals continue to get richer, widening the economic inequalities in the country notwithstanding the income gap among the population.
The combined wealth of the 5.12 million families in China with over six million yuan (USD 824,000) in assets was stated to be about 150 trillion yuan (over USD seven trillion) in 2024, a report published by the Hurun Research Institute said.
Of this wealthiest, 130,000 families accounted for 58 per cent in 2024 which is up from 56 per cent a year earlier, the report said.
In a bid to boost the sagging economy, President Xi on Feb 17 held a rare meeting with the country’s top corporate leaders, including e-commerce giant Alibaba founder Jack Ma, and urged them to unleash their talents to shore up sagging business confidence in the country to reverse the economic slowdown.
Xi’s meeting with leaders of the top corporate houses came amid a severe ebb in private sector morale prompted by a volatile mix of economic issues, including heightened geopolitical tensions with the US and harsh regulatory crackdowns on some of the country’s business firms.
