MORE UNPREDICTABLE
Likely top of the agenda is Trump, who in just over a month back in the White House has overturned the international order and proven even more unpredictable than in his first term.
The US president imposed additional 10 per cent duties on products imported from China last month and has threatened more.
The move could affect hundreds of billions of dollars in trade and may worsen if the magnate follows through on his threats of even higher customs levies.
A US-led push to squeeze China out of international supply chains for high-tech chips and other sensitive technology – spearheaded by Joe Biden’s administration – is also expected to ramp up.
That effort has driven Beijing’s policy of technological self-reliance, part of a broader initiative by China’s leadership to develop “new quality productive forces” that it hopes can boost growth.
Last May, Beijing poured more than US$47 billion into the country’s largest-ever chip investment fund – the third phase of an effort that outpaced the first two phases combined.
“Beijing is betting that a massive party-led push for research, innovation, commercialisation, manufacturing and digitalisation can create new economic growth drivers,” analysts Neil Thomas and Jing Qian at the Asia Society said in a note.
China hopes it can “replace the real estate sector and generate productivity gains that help mitigate issues related to debt, demographics and dependence on the West”, they added.
Analysts also said pressure from Trump could encourage Beijing to step up the kinds of support for the economy seen last year – interest rate cuts, easing local government debt pressure and expanding subsidy programmes for household goods.
“We expect China to increase policy support in response to greater external shock from the US,” Wang Tao, chief China economist at UBS, told AFP.
And more “will be rolled out later in the year … should there be additional significant tariffs or other external shocks, or should the property downturn turn worse”, she added.
