Beijing signals economic challenges ahead of the Trump-Xi summit
As Beijing acknowledges economic headwinds, expectations for the Trump-Xi summit cool while tensions surface in tech and trade
Welcome back to What’s Happening in China, your weekly China brief.
The Politburo held its April meeting on Tuesday to review the economic outlook. From the readout, although “China’s economy has gotten off to a strong start,” the economy “faces some difficulties and challenges, and the foundation for sustained economic recovery and improvement still needs to be further consolidated.”
With less than 2 weeks to go before the May 14-15 Trump-Xi summit in Beijing, the conflict in Iran, concerns regarding Taiwan, and mutual complaints about trade policies remain key sources of tension.
Writing in Foreign Policy this week, Neil Thomas and Haolan Wang lowered the expectations for the meeting: “success should be measured not by whether Trump and Xi make a dazzling announcement but by whether they leave behind thicker diplomatic machinery than they found. Summits are usually judged by deliverables: action plans, business deals, a joint statement. Those matter. But history suggests that the more important question is whether a meeting creates durable mechanisms that make future crises easier to navigate.”
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By ordering Meta to unwind its $2 billion acquisition of Manus, a China-founded AI startup based in Singapore, Beijing sent a strong message this week to actors in the tech sector, from entrepreneurs to foreign and domestic investors, as well as law and consultancy firms.
Under Xi Jinping, technology is a part of national security, and any such deals are now examined in the context of U.S.-China strategic competition.
According to the Wall Street Journal, “Beijing has handed the two companies a preliminary deadline of several weeks to unwind the deal and fully restore Manus’s Chinese assets to their original state.”
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Chinese netizens reacted with sharp humour to China’s Ministry of State Security, the country’s intelligence agency, claim that “anti-China forces are promoting ‘lying-flat’ narratives toward Chinese youth.”
Take a look at some of the reactions compiled and translated by the indispensable China Digital Times:
I suspect my boss is a “hostile foreign force,” because we work ourselves to death every day, but we’re still broke. Clearly, our spymaster boss is using this tactic to incite employees to slack off, the diabolical fiend.
Give everyone a two-day weekend, an eight-hour workday, and the full “five social insurances” plus the “housing provident fund.” Enforce the Labor Law properly, and those hostile foreign forces will be speechless.
Another comment reads: “Foreign organizations” is a catch-all term, a basket you can stuff anything into. Weak economy? Blame foreign organizations. Low birth rate? Pin it on those foreign organizations. Low marriage rate, high divorce rate? Darn those hostile foreign organizations. Everything’s their fault.
In the current economic environment, where the youth unemployment rate remains high, blaming foreigners is a familiar scapegoat.
Let’s jump into it.
— PC
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