Delegates, including Chinese President Xi Jinping (center), stand for the national anthem during the closing session of the National People’s Congress at the Great Hall of the People in Beijing, Thursday.
Ng Han Guan/AP
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Ng Han Guan/AP
BEIJING – China’s foreign ministry has criticized a US investigation opened this week into the trade practices of dozens of countries, calling it a “pretense of political manipulation”.
US Trade Representative Jamieson Greer on Wednesday announced an investigation into what the administration considers “overcapacity and production in manufacturing sectors” in countries and blocs including China, Mexico and the European Union. The move came after the Supreme Court last month struck down tariffs imposed by the President on imports from countries around the world. This could enable the administration to impose tariffs on goods from countries if it is determined to discriminate against US companies.
“We oppose any kind of unilateral tariff measures,” Foreign Ministry spokesman Guo Jiakun told reporters on Thursday. “The issue of so-called ‘overcapacity of China’ does not really exist and should not be used as a pretext for political manipulation.”
It comes just weeks before President Trump and Chinese President Xi Jinping meet for a high-level summit.
It comes as lawmakers in Beijing approve a roadmap for economic growth that continues the kinds of practices that have angered some of its stakeholders.
China’s new five-year economic roadmap
China’s legislature on Thursday approved what it calls the Five-Year Plan, a social and economic blueprint that includes policies around technological self-sufficiency and industrial production.
While the plan does not mention the US, “Beijing is focused on maintaining what it calls its ‘great-power competition’ with Washington,” said Yu Jie, senior China research fellow at Chatham House, a London-based think tank.
Here are the key takeaways from China’s plan.
1. Scientific and technological self-reliance
The plan calls for “substantial reforms” to make China self-reliant and strengthen its science and technology sectors.
Yu writes that China has long been uncomfortable relying on foreign suppliers of high-end technology such as aircraft engines and high-end semiconductors.
The determination for self-reliance hardened after the US blocked sales of high-end semiconductors and advanced technologies to Chinese firms.
China is set to increase research and development spending by more than 7% annually.
2. A global leader in tech innovation
China doesn’t want to catch up with the US and Europe in semiconductors and aerospace, but wants to lead future industries in areas ranging from intelligent robotics, biomedicine, quantum technology and drones to the so-called “low-altitude” economy. Flying taxis.
Similar ambitions in the past have raised concerns among American and European business groups in China that they have little chance.
China’s official news agency Xinhua tried to allay those fears: “Tech sovereignty is not about isolation,” it said in an editorial.
3. Doubling industrial production
China wants to innovate like the US and produce what it invents.
The plan calls for manufacturers to build a “modern industrial system with sophisticated manufacturing as its backbone” to take advantage of China’s advances in robotics and artificial intelligence.
However, the blueprint does not address the problem of “encroachment,” where fierce competition among manufacturers has led to price wars and oversupply, affecting profits and increasing trade frictions abroad.
Many Chinese manufacturers have been accused of dumping their excess inventory overseas, undercutting their trading partners’ core industries.
The plan calls for strengthening China’s competitive advantages in rare earths and other strategic minerals. Chinese officials used China’s advantage as leverage to pressure President Trump to roll back triple-digit tariffs on Chinese exports last year.
4. Increasing consumption
The plan calls for a “dramatic increase in enthusiasm”.
Much of China’s household wealth is invested in real estate. Years of property slumps have made Chinese consumers spend more cautiously.
Successive US administrations and European leaders have called on China to solve its overcapacity problem by reviving its domestic consumption.
“They want China to actually export less and import more, stimulate local consumption, raise local wages so they can sell more to China,” said Wang Dan, China director of Eurasia Group.
The plan lists consumption as a key task, but it does not provide details on how China might address this gap.
