China’s economy is facing increasing “uncertainty” in the international environment as well as insufficient domestic demand, a top financial official said on Thursday. Beijing on Wednesday set an ambitious annual growth target of around five percent as the escalating trade war with the United States hits exports.
US President Donald Trump has increased tariffs on Chinese imports this week, in line with a pledge he made during his inauguration. Zheng Shanjie, chairman of China’s National Development and Reform Commission, said at a press conference that he was “fully confident that China can achieve its economic growth target this year.”
“We have the basic support and assurance to achieve this year’s five percent economic growth target,” Zheng said. Speaking during Beijing’s annual bi-session political meeting, Zheng acknowledged that “uncertainty in the external environment is increasing.” He said, “We are also facing some problems such as insufficient domestic demand, production and operational difficulties in some industries and some enterprises.”
“However, we believe that these difficulties and challenges are in the process of development and progress, and they can all be overcome and resolved,” Zheng said. China’s significant growth figures, announced by Premier Li Keqiang at the Communist Party’s annual conference on Wednesday, were broadly in line with an AFP survey of analysts, although experts said they were ambitious given the magnitude of China’s economic challenges.
The world’s second-largest economy is struggling to regain its footing after the COVID-19 pandemic, with a persistent debt crisis affecting domestic consumption and the vast property sector. Trump’s latest round of tariff hikes has further increased the obstacles China faces.
These taxes are estimated to have an impact of hundreds of billions of dollars on total trade between the world’s two largest economies. Beijing announced its own measures on Tuesday in retaliation for Washington’s latest tariff hikes and vowed to fight the trade war to the “bitter end.” The move will see China impose tariffs of up to 15 percent on US agricultural products, including soybeans, pork and wheat, starting next week.
