Beijing, China - - - As US President Donald Trump stepped up economic pressure on China during the past week, Beijing retorted with one of its own: Its ascendancy will not be slowed down.
Among the most important political meetings that occurred in the capital was the ideal backdrop for Beijing to respond. The "two sessions" conclave of China's rubber-stamp legislature and its top political advisory body is where the state sets out plans and sets the tone for the year ahead.
Number one on its to-do list? Stacking up domestic demand so that China no longer relies on exports to drive its mammoth but decelerating economy. And number two: continuing leader Xi Jinping's vision of making the country a high-tech superpower, by stepping up investment and engaging the private sector.
Beijing is making these overtures as it prepares for what could be a protracted economic war with the United States. Trump doubled additional tariffs on all Chinese imports to 20% on Tuesday and has threatened more to come – along with closer control of American investment in China.
We can overcome any challenge to pursue development," No. 2 leader Li Qiang told thousands of delegates seated in Beijing's Great Hall of the People during the first session of the National People's Congress on Wednesday. China's "giant ship of the economy" will "keep steadily into the future," he said.
A foreign ministry spokesman was more direct when asked on Tuesday about trade tensions: "If the US continues to wage a tariff war, trade war, or any other kind of war, China will fight to the end," he told reporters.
And while Beijing's agenda – and words – are as in previous years, this year they are coming from a country that is starting to reassert itself after having been buffeted by its own Covid lockdowns, a housing market crisis and by a tech war with the US.
“Confidence” has been an unofficial buzzword of the weeklong event, which ends Tuesday. It was used nearly a dozen times during a press conference held by China’s economic tsars on Thursday, splashed across state media coverage and included in a pointed reminder – that “confidence builds strength”– during the closing lines of Li’s nationally broadcast speech.
That optimism can be more hope than reality. Most in China are looking to the future with doubts. They're more likely to save than spend, and young adults are struggling to find work and wondering if their own lives will be better than those of their parents.
But unlike last year, the country is entering 2025 propelled by the market-stirring achievements of Chinese firms and technology. And while Trump's comeback has China on edge about financial risk, it's also seeking opportunity in its own rise.
"By the end of Trump's second term, America's credibility image and global standing will have declined," People's Liberation Army Sen. Col. (ret) Zhou Bo, a senior fellow at Beijing's Tsinghua University Center for International Security and Strategy, told CNN in an interview. "And as the strength of America weakens, China, of course, will look more important."
Confidence boost
This feeling isn't welling up just in corridors of power.
On city streets, brand-new locally made electric vehicles zip by, including those of car manufacturer BYD, which now rivals elbow-to-elbow with Elon Musk's Tesla worldwide in sales – a demonstration of China's capacity to become a green tech leader.
And box office record-breaker animation "Ne Zha 2" and overnight phenomenon of private Chinese AI firm DeepSeek are a couple of notable examples. Its giant language model shocked Silicon Valley and upended Western presumptions regarding the costs of AI.
This week in Beijing, "you can ask DeepSeek" has been a sarcastic and bragging punchline for casual conversations.
"People felt last year the US story that China is decaying, China reached its peak, had its effect," noted Wang Yiwei, director at Beijing's Renmin University of the Institute of International Affairs. "We do have many challenges. We have many issues of course, but it's not that we're peaked China."
Even Trump's focus on Chinese economic competition with Beijing as he imposes tariffs against US trading partners appears to be a badge to some of China's advancement. On a late afternoon in central Beijing, a few individuals that CNN spoke with cited competition against the US as proof of China's growing might.
"China is developing fast these days and that has attracted foreign interest, especially from America," but maybe not a bad thing, said a medical postgraduate student named Xia. "Trump's tariffs raise are competition … (and) if there is no competition then China's independent development is not possible."
High stakes rivalry
But despite attempts by Chinese leaders to sound confident, other observers say economic stimulus policies released this week demonstrate that Beijing is gearing up to face major issues in the near future.
In his opening speech, Premier Li spoke about it. "The external environment becomes increasingly complicated and harsh, and that might be more intensive towards the country's foreign trade, science and technology and other fields," he noted.
China doesn't want to face that uncertainty as well as being weighed down by a moribund domestic economy. That's one reason why it's trying to stoke consumption and stimulate growth, setting an ambitious goal of "around 5%" growth this year. Beijing is also aware that trade tensions mean that the economy must become less export-reliant.
It is likely that Beijing has weighed the Trade War 2.0 possibilities, but no matter what happens, it is clear that China's development will have to rely more and more on domestic demand," wrote Bert Hofman, a professor at the East Asian Institute of the National University Singapore and a former World Bank country director for China, in a note.
However, others claim that Beijing's intentions are light on details and much less ambitious than are needed to get the economy humming and consumers optimistic.
It is equal to a sense on the leadership's part that they would like to realign towards growth and development but yet a desire to do only what is required in terms of stimulus in order to get there," said Asia Society Policy Institute's Center for China Analysis fellow Michael Hirson.
Xi might also be balancing this goal against a second consideration: the need to leave some powder dry to assist the economy in case China has "a nasty four years coping with Donald Trump," he added.
Beijing also wishes to channel resources into the high-tech upgrading of its economy and industries. That's another central component of the government's 2025 agenda – and a long-term goal of Xi, who unlike US presidents is not bound by term limits on his rule.
Beijing is promoting innovations in AI, robotics, 6G and quantum technology, unveiling a state-fertilized fund to finance tech innovation and even inviting foreign companies – a notable tonal change for Xi – to have a stake.
China is still in shock from the first Trump administration's attempt to exclude its technology giant Huawei from global mobile networks and from the Biden administration's attempt to entice allies into joining it to limit Chinese access to cutting-edge semiconductors.
In the last month, Washington has said that it is considering expanding prohibitions on US investment in sensitive Chinese technology.
But Beijing this week has also boasted about its confidence in making headway despite setbacks.
"Whether it is space science or chip manufacturing, unreasonable outside oppression has never stopped us," Chinese Foreign Minister Wang Yi told reporters Friday. "But where there is blockade, there is breakthrough; where there is suppression, there is innovation."
"We are witnessing a widening horizon for China to become a science and technology giant," he said.
The Trump threat?
How much Trump's policies will push China is an open and urgent question for Beijing.
The US president has thus far refrained from imposing the blanket 60% or more tariffs on Chinese imports that he had threatened on the campaign trail.
He's been occupied with other things, such as unleashing wholesale US global leadership changes by demolishing US foreign aid, threatening to seize control of other countries' sovereign ground, and dismantling US European alliances while closing in on Russia at the expense of Ukraine.
There are dangers in that upheaval that can put Beijing at risk. For example, if a Washington-Moscow rapprochement diverts Xi away from his best friend and closest ally, Russian President Vladimir Putin, or if an American relaxing defense in Europe frees it up to increase emphasis on Asia.
But Chinese emissaries have been taking advantage of the changes too to promote their country as a stable and responsible world power while Beijing is censured for its own aggressive moves in Asia.
"A great nation should stand up to its global duties and fulfill its rightful obligations. It should not put interests first, much less wield the authority to bully the weak," Foreign Minister Wang Yi said on Friday in reply to a CNN question about Trump's "America First" policy. China "strongly opposes power politics and hegemony," Wang added further.
On tariffs, viewers report that Beijing is trying to moderate its reaction, holding out for a potential Xi-Trump summit or even an agreement that can prevent a continuous trade war.
While China quickly retaliated against two sets of US tariffs this year, such as with tariffs on US energy and key agricultural products, it has been cautious in its retaliations.
The country's deficit against the US means it will have fewer room to respond if a trade war expands, but Beijing would probably be calculating other tools like export controls it could use to threaten.
And the argument from some corners is that even though tariffs might cause short-term pain to the Chinese economy, it will be America that loses out in the end. China is still part and parcel of global supply chains. It's also better placed to weather this trade war than the last one, since it's exporting more goods to more markets around the world today, statistics show.
"If you're playing games (imposing tariffs) with a peer rival, it just wouldn't work as well as if you're playing this game with small countries or medium powers," said Zhou in Beijing, who is also the author of the forthcoming book "Should the World Fear China?".
China, he said, wants cooperation, not friction.
But since the US is still the stronger side of this relationship, (it will) decide what kind of relationship this is … so China has to say 'OK – if this has to be to be one of rivalry, then we have to have the guts to fight,'\" he said to his audience.
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