Xi Calls for Economic Resilience as U.S. Tariff Threats Escalate

President Xi Jinping urged China to confront economic challenges head-on, emphasizing centralized leadership as the backbone of stability.

His remarks, published in the Communist Party’s Qiushi magazine and reported by Xinhua, followed a Politburo meeting that reviewed Premier Li Qiang’s upcoming government work report for the National People’s Congress (NPC).

The meeting focused on economic stability, technological innovation, and quality-driven growth amid mounting external pressures. Xi’s comments came as U.S. President Donald Trump announced plans to double tariffs on all Chinese imports to 20% starting next week.

These measures threaten China’s export-driven economy, which grew by 5% in 2024 but faces slowing domestic demand, a property slump, and demographic challenges.

Xi stressed the Party’s ability to make strategic decisions during critical moments, ensuring long-term growth despite global uncertainties.

The Politburo outlined key measures for 2025, including expanding fiscal spending. For the first time in 14 years, they also plan to adopt a “moderately loose” monetary policy.

China’s Economic Strategy

The government plans to increase its fiscal deficit ratio to 4% of GDP and issue special local government bonds alongside ultra-long treasury bonds. These funds will support infrastructure projects, public welfare programs, and social initiatives.

For example, planned spending includes R$12 trillion ($2 trillion) on infrastructure and R$6 trillion ($1 trillion) on social programs. Monetary policies will lower reserve requirement ratios and interest rates while deploying liquidity tools like reverse repos to boost credit flow.

The government aims to stimulate household consumption by raising incomes for middle- and low-income groups, increasing pensions, and subsidizing healthcare and education. Emerging sectors such as cultural tourism and services for an aging population will also receive support.

Technological innovation remains central to China’s strategy. Investments in artificial intelligence, quantum computing, green energy, and digital technologies aim to reduce reliance on foreign technology.

The AI sector alone is projected to grow from R$1.3 trillion ($217 billion) in 2023 to R$4.9 trillion ($817 billion) by 2028. As China concludes its 14th Five-Year Plan in 2025, Xi’s call for unity underscores the Party’s focus on balancing short-term recovery.

This focus also emphasizes the importance of long-term reforms. The NPC meeting next week will finalize these plans while setting cautious growth targets around 5%.