China worried about reviving its slowing economy

China’s biggest political event of the year has been concluded without any answer to the problem of falling economic growth in 2025.

The need to boost investment and consumer spending was te main theme fir te he weeklong meeting of the nearly 3,000-member National People’s Congress.

How things move will only become clear in the months ahead as the ruling Communist Party juggles priorities.

What is clear is that a trade war with the United States and the border problems with neighbour India has left the outlook for the coming months uncertain.

The meeting ended Tuesday in the absence of top political leader Zhao Leji, who is the chairman of the Standing Committee of the National People’s Congress.

Zhao, was suffering from a respiratory infection and had to take a leave. The health of the world’s largest economy (PPP terms) is in doldrums.

China is a major exporter of products to countries around the world and an important market for Western companies from Apple to Volkswagen.

A prolonged property crisis has sapped consumer and business confidence, depriving the economy of its past vitality. Now, a tariff war with USA the Second largest economy and border problems with the third largest is compounding those problems.

China has made announcement of an economic growth target of “about 5%” for this year, a level that analysts said would be difficult to achieve with the measures detailed during this year’s Congress.

They include borrowing more money for a slew of initiatives, but much of the borrowing will go to supporting the housing market and local governments weighed down by debt.

“It is unclear how much of a jolt this budget will provide to underlying domestic demand and reflation efforts, despite the sizeable rise in the deficit,” Jeremy Zook, the lead China analyst for Fitch Ratings, said in a report.

The ambitious 5% growth target signaled to analysts that more stimulus may be coming. Last year, the government surprised stock markets with various moves beginning in September to push growth up to 5%, also the target in 2024.

Chinese President Xi Jinping seems bent on reinvigorating private businesses, which provide a large share of growth and jobs in the country’s state-dominated economy.

Years of regulatory crackdowns have shaken the confidence of entrepreneurs and other investors.

The Congress reviewed comments on a law meant to improve the environment for private enterprises by regulating aspects of market access, financing, competition and property rights protection, among others.

Xi aims to send a “message to entrepreneurs, but also to local governments and regulators, that the private sector’s important and it’s necessary,” Neil Thomas, a fellow on Chinese politics at the Asia Society Policy Institute, said ahead of the congress.

Private companies will also gain access to a higher share of loans than before, and financing for private businesses raised through bond issuance will be expanded, Chinese Premier Li Qiang said in his work report.

The foreign minister says the US shouldn’t bully

Much rides on how far Trump pursues his trade wars with China and other countries.

China has diversified its export markets in recent years, but the U.S. remains a vital trading partner. The greater fear is not the tariffs themselves but the health of the U.S. economy and demand for Chinese products, said Alicia Garcia Herrero, the chief Asia-Pacific economist for Natixis investment bank.

Trump has raised tariffs on imports from China twice since taking office in January. China has shown no sign of backing down.

“If the American side goes further down this wrong path, we will fight to the end,” Commerce Minister Wang Wentao told journalists during the Congress.

Asked about Trump’s “America First” policy, China’s Foreign Minister Wang Yi said the law of the jungle would reign if all countries adopted a “my country first” approach.

“A big country should honour its international obligations and fulfill its due responsibilities,” he said to journalists at the Congress. “It should not put selfish interests before principles, still less wield its power to bully the weak.”

The government said in its annual report that it would address what it considers unproductive “rat-race” competition among youngsters. The government is applying the term “neijuan” — more commonly translated as “involution” — to companies and local governments rather than workers.

A proliferation of green energy firms, for example, has led to gluts in solar panels and other equipment and fierce price wars that ultimately harm the industry.

“Their strategies are similar, which leads to extremely cruel competition,” Chinese tech leader Lei Jun, the CEO of Xiaomi and a delegate to the Congress, told state media.

The solutions are unclear, experts say, noting that government subsidies for green energy helped create the problem by encouraging so many start-ups.