Response to US sanctions: China’s economy should become more independent

Response to US sanctions: China’s economy should become more independent

The trade dispute with the USA is troubling China. With the development of a new five-year plan, the rising superpower is striving for more independence on the world market. The doors should still be open for investments from abroad.

Four-day discussions with the communist leadership on the new five-year plan have begun behind closed doors in Beijing. Against the background of the trade war with the USA and the global economic downturn caused by the corona pandemic, the second largest economy is striving for greater independence from the rest of the world.

The plenary session of the Central Committee of the Communist Party sets the course for the new economic plan. It will apply for the years 2021 to 2025 and is to be formally approved at the annual meeting of the People’s Congress in March next year. The focus is on a realignment, which State and party leader Xi Jinping describes with the catchphrase “dual cycles”. The new strategy aims to strengthen its own technological innovation and make China more independent in the face of the trade and technology conflict with the USA.

The Middle Kingdom is vulnerable

It is something like Beijing’s response to American considerations for “decoupling” from China. Second, the plan is once again based on the long pursued strengthening of domestic demand in order to reduce export dependency and susceptibility to crises. American sanctions have brought Chinese technology giants such as telecom equipment and smartphone manufacturer Huawei, chip manufacturers and Internet companies such as Tiktok or Wechat into trouble, thus demonstrating their vulnerability. Experts see behind the conflict the growing rivalry between the ailing superpower USA and the rising Asian power China.

China’s leadership believes that if Democratic presidential candidate Joe Biden wins the November 3 election over incumbent Donald Trump, tensions will persist. Behind this lies deep-seated suspicion “because China is growing so quickly – perhaps beyond expectations, ideas or the extent that the developed world accepts,” said Vice Foreign Minister Qin Gang recently in front of journalists. “We’re catching up quickly. That makes some countries like the US nervous.”

Economy continues to grow – despite Corona

It is also followed with particular interest whether the party’s high decision-making body will set a target for economic growth at its meeting by Thursday. The expiring five-year plan had set 6.5 percent as the average annual growth target. Due to the great uncertainties caused by the pandemic, the People’s Congress had not decided on a target for this year at its meeting at the end of June.

Since China is now largely under control of the coronavirus, it is likely to be the only major economy to record growth this year. After a sharp slump at the beginning of the year, the Chinese economy grew again by 4.9 percent in the third quarter compared to the same period of the previous year. Experts also assume that China’s economy is likely to grow by around five percent a year over the next five years.

The plenary will continue to look into the future and formulate general goals for the next 15 years. Although China wants to promote self-employment, its own research and development and domestic demand, the leadership in Beijing has repeatedly emphasized that the doors to investment and capital from abroad will not be closed. President Xi Jinping recently spoke of a “new open economic system”.

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Author: Killian Jones
Graduated From Princeton University.He has been at the USTV since 2017.
Function: Chief-Editor

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