China shows confidence in the economy despite slowing growth and the US trade war

China's top leaders tried to project confidence in the country's economy on Wednesday despite slowing growth, escalating the trade war with the US and increasing geopolitical uncertainty by the Trump administration.

The government set a bold target for the year, with Prime Minister Li Qiang, China's highest official after Xi Jinping, saying that China would expand its economy by “about 5%” in a report at the opening of the country's annual session of rubber stamp parliament.

The Beijing conference, known as the National People's Assembly, is a strictly scripted political pageant that shows how XI will guide China through what is often described as “a major change that is not seen in the century.”

Its vision includes lifting China's technical capabilities and independence and strengthening its military capabilities to control the Asia-Pacific region. It focuses on strengthening the grip on power of the ruling Communist Party by making national security of all aspects of Chinese society a priority.

Security is a top priority at legislative conferences, bringing about 3,000 representatives to the mass conference. The mediocre police and soldiers in uniform were featured on several checkpoints on the main roads and pedestrian bridges near the venue, and the entrance to the nearby metro station was temporarily closed.

XI and his top officials have been trying to restore faith in the economy. This has struggled to regain momentum after being hit by the pandemic and a crash of housing that wiped out much of the wealth of many Chinese Chinese people. However, achieving a growth target of around 5% will be even more difficult than in the past few years due to the trade war with the US, which shows few indications of mitigation.

XI is stubborn about Washington, indicating that China must be treated as equals. He refused to succumb to our pressure, as did Canadian and Mexican leaders by getting engaged to Trump, after the US president first called for a 25% tariff on his country in January. Instead, China responded with retaliatory trade measures. The latest was announced Tuesday, targeting agriculture US, which has shook a heavily for Trump in last year's election.

China must borrow more for over 30 years to support the economy. More than that, China needs households to start spending again to turn its wealth around. Consumer trust has been hit hard by the crisis in the housing market, where most Chinese households store their wealth.

China has long debated the truth behind the country's economic data by foreign economists, but has not missed growth targets since 2020, when the economy in 2020 was shrinking due to the community pandemic.

Under Xi, Beijing emphasized control in the national sector's economy, rattling entrepreneurs with private companies crackdowns. However, in recent months, Chinese leaders, including Xi himself, have more willing to acknowledge the importance of private companies in driving growth.

Last month, XI held a rare meeting with business leaders, including Jack Ma, founder of internet giant Alibaba, who had been on the sidelines for four years for criticizing Chinese regulators. XI praises technology as a major driver of development, and praises the measures to make China more independent and vulnerable to pressure from the US.

Analysts say China is more prepared for Trump than his first term.

This was highlighted on Tuesday when China announced that it would place tariffs of up to 15% on some U.S. agricultural products and imposed punitive trade measures on 15 American companies, including drone maker Skydio. They also added what they called “untrusted entity lists” to ten other American companies, preventing them from doing business in China.

The move responded to an additional 10% tariff on Tuesday on 10% tariffs on Chinese goods. The administration accused China of not doing enough to stop the flow of fentanyl and immigration to the United States.

But the trade war is just one aspect of China facing its second Trump presidency. It also weighs the options as Trump imposes a dramatic reversal of American foreign policy. He reversed relations with historic US allies such as Canada, Mexico and Europe, turning his back on Ukraine and coincided with his country's longtime rival, Russia, China's most important and major partner, China on the global stage.

China is also courting Europe, but is also strengthening its diplomatic interactions with Russia, and XI told President Vladimir V. Putin last week that he called on China and Russia as “true friends.”