Comment: What does Chinas policy goal this year mean to Sino -US relations?

Source: Bloomberg

China's annual policy report shows that in order to resist economic challenges, this year may need to pay well with the United States. Although the ambition to increase technology investment and military expenditure suggests, the tension between the two parties will not be fully repaired.

The major goals proposed by the Chinese government on Tuesday include the action of curbing China's scientific and technological progress and improving national defense expenses in response to the leadership of the United States, highlighting the continuity of competition between China and the United States.However, he can also find the tone of cooperation in the speech of the Premier Li Qiang of the State Council. He emphasized that it is necessary to ensure that the overall foreign trade and investment are stable.

James Char, a researcher at Nanyang University of Science and Technology in Singapore, said that in view of the economic challenges facing China, "foreseeable foreseeableness will temporarily maintain non -hostile relations with Washington."He added that only by doing so, Beijing "has the opportunity to win back to investor confidence and reverse the trend of large -scale foreign outflows of foreign capital."

The impact of the Chinese government work report on Sino -US relations may involve the following aspects:

Technology and Trade

The Chinese government promised to use national resources to accelerate the breakthrough of scientific and technological breakthroughs in the work report.President Xi Jinping has been promoting technology autonomy. As the United States and its allies seek to curb China's ambitions in the field of chips, electric vehicles and artificial intelligence, this goal has become more important.

The export of advanced technologies in Washington's regulation of Washington restricts the cutting -edge chip required by China to obtain the development of the AI ​​model.Bloomberg News reported this week that Advanced Micro Devices Inc. was banned from selling chips customized for the Chinese market, and Washington believed that the chip was still too powerful.

The Chinese government also promised on Tuesday to prevent overcapacity of some key industries; after cutting prices to maintain competitiveness, the profit margin of corporate profits was squeezed.

China is also investing a lot of funds from the manufacturing industry to find a new growth engine to offset the drag of the real estate industry.This means investing more funds into electric vehicles, batteries, and renewable energy -although it has also caused imbalances, which may cause tension between trade relations between China and developed countries.

Foreign capital access

In the speech of the National People's Congress, Li Qiang promised to solve the prominent problems that hinder foreign companies operating or curb overseas investment in China.He mentioned that it is necessary to take measures to allow foreign companies and local enterprises to participate in government procurement and bidding and bidding equally.

With the slowdown of the economy and the geopolitical situation, it has become more pessimistic about China and other foreign companies in recent years.Overseas companies' direct investment in China fell to 30 years in 2023, and the profit of foreign industrial enterprises in China in 2023 decreased by 6.7%compared with 2022.

There are some preliminary signs of improvement.The President of the US Chamber of Commerce visited China at the end of last month. A recent survey by the Chinese Chamber of Commerce in China showed that companies are optimistic about potential profits.

"We are encouraged to the implementation of reforms to make foreign and local investors in fair competition," said Sean Stein, chairman of the American Chamber of Commerce in China on Tuesday."But the statement cannot drive the market, and promises cannot promote investment. As in the past, the key is to implement a comprehensive and timely implementation."

Taiwan Strait situation

Li Qiang reiterated China's consistent tone on the Taiwan issue, saying that he resolutely opposed Taiwan independence.He also said, "To promote the peaceful development of cross -strait relations, unswervingly promote the great cause of the motherland, and safeguard the fundamental interests of the Chinese nation."

The tension between China and the United States revolved around the Taiwan issue does not disperse.In 2022, the meeting between Taiwan Cai Yingwen and the senior Congress of the United States made China hold a large -scale military drill in the Taiwan Strait. Later, after the meeting between Xi Jinping and Biden in San Francisco later last year, Sino -US relations were eased.

Last week, the Global Times reported that the tension of the South China Sea and the Taiwan Strait stated that the expected growth of national defense budgets was reasonable.

Military expenses

China said that this year's defense expenditure will increase by 7.2%to 1.67 trillion yuan, the largest increase in five years.Last year, Biden signed a US $ 886 billion national defense bill, including financing for the country in the Indo -Pacific region to counter China's influence.

Former U.S. Department of Defense officials and senior researcher at the Liney Yew Public Policy School of Singapore Drew Thompson said that the increase in national defense expenditure seems to exceed the economic growth rate and also shows that "Beijing is increasingly concerned about the external environment."He added that the PLA may have "more resources to use military stress on neighboring countries."

ORIANA Skylar Mastro at the Institute of International Institute of Stanford University of Stanford University said that even if funds point to people, not weapons or equipment, it will not reassure the United States.She said that this is because human beings are the "number limit" of the military, which makes China cautious about the use of force.

Economic concerns

Li Qiang acknowledged that the expected economic goal of about 5%of this year was "not easy", saying that "policy focusing on hair power, double work efforts, and work together in all aspects."

The direction of this year's economy still faces many uncertainty.The stimulus measures are still relatively mild. Beijing disclosed the special government bond issuance plan on Tuesday, but still maintains the overall fiscal deficit at 3%of the target level last year.

"If you are a Americans who are considering investing in China, the key question is: consumption will rebound? It's really unclear," said Joseph Peissel, an economic analyst of Trivium China.

Pantheon MacroeConomics chief Chinese economist Duncan Wrigley said that long -term economic structure adjustment first means that "China may continue to output inflation this year this year."The Chinese government's goal of this year's inflation is 3%, but consumers are undergoing serious contraction.

Although Chinese goods account for a small proportion of consumer prices in the United States, this trend of inflation may be welcomed by the Fed.Despite the stubborn inflation, the Fed is planning to cut interest rate cuts.