PRC targets 5% growth despite trade war with U.S.
Plus, Liu Jiakun wins 2025 Pritzker Architecture Prize
Welcome back to What’s Happening in China, your weekly China brief.
I hope you’ve had a great week.
The Two Sessions kicked off this week with a series of government announcements: a 2025 GDP growth target of “around 5%,” which many economists view as highly ambitious, an increase in the government budget deficit from 3% to 4% of GDP, an inflation target of 2%—the lowest in over 20 years, down from the previous 3%—and a 7.2% rise in defense spending.
As new U.S. tariffs on PRC imports took effect on Tuesday, Beijing announced retaliatory tariffs of up to 15% on key U.S. food and agricultural imports, effective March 10, along with additional countermeasures.
On the same day, responding to a related question from The New York Times, foreign ministry spokesperson Lin Jian remarked that “intimidation does not scare us.” He then warned, “if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”
On Friday, on the sidelines of the meetings and in contrast with Lin Jian’s confrontational remarks, Foreign Minister Wang Yi responded to a question about Trump’s “America First” policy, saying that “Should everyone stress ‘my country first’ and obsess over a position of strength, the law of the jungle would reign again, smaller and weaker countries would bear the brunt first, and international norms and order would take a body blow.” While the U.S. under Trump retreats from multilateral agreements and imposes tariffs on allies and rivals alike, the PRC is trying to present itself as a bastion of stability. According to Wang Yi, Beijing “will provide certainty to this uncertain world.”
Of course, Wang Yi’s rhetoric raises the question of how his statement about opposing “the law of the jungle” aligns with the PRC’s assertive territorial claims in the South China Sea, its support for Russia amid the Ukraine conflict, its approach to Taiwan, and its domestic policies in regions like Tibet and Xinjiang. The disconnect between diplomatic messaging and policy implementation calls into question Beijing’s own adherence to the international order it claims to defend.
The CPPCC runs until March 10, with the NPC closing the following day, so expect more announcements in the coming days and weeks. Stay tuned.
Now, let’s jump into it.
— PC
Through the Lens
In Focus
I. The Two Sessions
The Chinese government unveiled an annual economic growth target of “around 5%” on Wednesday, despite the possible negative impact of a looming trade war with the United States, and pledged to address what it called “sluggish” consumer spending at home.
The target was announced at the opening session of the annual meeting of China’s legislature. It’s the same as for the last two years but will likely be more difficult to achieve because of the new, higher U.S. tariffs on Chinese products and other economic headwinds. The use of “around” gives the government some room if growth falls short.
Read: China sticks to an economic growth target of 'around 5%' despite a looming trade war with US (AP)
Related:
China Lowers Annual Inflation Target to Around 2% (Bloomberg)
China has room to act on fiscal policy amid uncertainties, finance minister says (CNBC)
Two Sessions: Labor Rights, Child Safety, AI Scams Among Key Debates (Sixth Tone)
II. Feminism in China
China has dropped 37 ranks in the Global Gender Gap Index – run by the World Economic Forum of which China is an advocate – since Xi Jinping became Communist Party General Secretary in 2012. The Communist Party diminishes the role of women in public office. For the first time in decades, there is not one woman among the 24 Politburo members, China’s executive policymaking body. Party spokespeople often encourage more traditional roles for women – as caretakers and mothers – to address an ageing population. And the Party has made it harder for women to organise or advocate for themselves in China, using online censorship and the 2017 Overseas NGO Law to stifle dissent among civil society.
To avoid “collaboration with Western hostile forces”, the Overseas NGO Law prohibits local Chinese NGOs from receiving funding from individuals or companies based overseas. Given the difficulty in public fundraising, this has practically cut off the money supply to activist organisations in China.
Read: Feminism is still a dirty word in China (Lowy Institute)
III. Mixue Bingcheng: “the world’s largest food and beverage chain by number of stores”
Two decades ago, a modest restaurant in the middle of one of China’s poorest provinces saw its business take off after selling cut-price soft serve for just 1 yuan (15 cents) per cone. Today, it has overtaken McDonald’s and Starbucks as the world’s largest food and beverage chain by number of stores.
Mixue Bingcheng, which means honey snow ice city, now boasts over 45,000 outlets worldwide as of last September. The budget-friendly drinks giant, which is now better known for its bubble tea offerings, saw its shares jump more than 40% on Monday in its first day of trading in Hong Kong, after having raised $444 million last week in an initial public offering, according to the Hong Kong Stock Exchange.
[…]
Nearly 90% of Mixue’s shops and sub-brands are within China. Its overseas outlets are in the Asia Pacific region, including Indonesia, Vietnam, and Malaysia.
While the company has more outlets than McDonald’s, Starbucks and Subway globally, Mixue’s sales still trails Starbucks, Inspire Brands, owner of Dunkin’ and Baskin Robbins, and Canada’s Tim Hortons, according to Momentum Works.
**Stay up to date on the most relevant stories from China. Consider upgrading your subscription to unlock exclusive posts. Learn more.**
Keep reading with a 7-day free trial
Subscribe to What's Happening in China to keep reading this post and get 7 days of free access to the full post archives.