The trade war with the US was the elephant in the room as the annual gathering of China’s political advisers began in Beijing on Sunday.
And while it was not directly mentioned in the advisory body’s official work report, the potential impact of trade tensions on the nation’s development could be found reading between the lines, and on the sidelines, of the meeting.
Addressing more than 2,000 representatives of the Chinese People’s Political Consultative Conference (CPPCC), Wang Yang – chairman of the political advisory body – highlighted the headwinds China was facing amid increasing rivalry with the United States.
“We must adapt ourselves to the changing times and changing situations, raise our awareness of potential dangers and possible concerns, fully understand all aspects of stability, and enhance measures to achieve progress,” Wang told an audience of intellectuals, businessmen and grass-root workers at the start of the parliamentary sessions.
While his annual work report did not explicitly mention the trade war, tensions between the world’s two biggest economies apparently set the tone for the speech and dominated talk among delegates on the sidelines of the event.
He said the CPPCC would focus on politics and stability this year, help to build a “moderately prosperous society” and fight battles against financial risks, poverty and pollution – tasks singled out by President Xi Jinping that are seen as crucial by the ruling Communist Party.
Wang also listed the job of “unequivocally opposing Hong Kong independence” in his report, pledging to fully implement the “one country, two systems” principle. He also called for greater unity and solidarity in 2019, a politically sensitive year marking the 30th anniversary of the Tiananmen crackdown and the 70th year since the establishment of the People’s Republic of China.
The CPPCC would also seek to contribute to diplomacy by facilitating high-level visits and intercultural exchanges and hosting events including the Sino-EU roundtable, the Belt and Road Seminar and the International Seminar on Peaceful Dialogue between religions.
It would boost cooperation on innovation under the “Belt and Road Initiative”, China’s ambitious but controversial global trade and infrastructure strategy. And with many elite delegates with overseas experience, Wang said the CPPCC would help to recruit talent from abroad and to tell China’s stories to the rest of the world “in an engaging way”.
Speaking on the sidelines of the gathering, delegate Yu Minhong did mention the trade war – and he thought it would “only do China good” over the long term, no matter how it evolved.
The New Oriental Education founder said the trade tensions would force China to reform, with Washington pushing Beijing to promise to better protect intellectual property and to improve the market mechanism.
“Undoubtedly, the trade war will bring about difficulties and uncertainties for China. But in the longer term, it’s not necessarily a bad thing,” Yu said.
Zhu Dingzhen, an engineer with the China Meteorological Administration, said the trade frictions would make China more focused on developing its own technologies – in line with the common belief among scientists that “technology is as crucial as rice bowls to China’s survival”.
Another delegate, Shi Ke, chairman of the Jiangxi Association for Science and Technology, said rivalry over technology was at the heart of the dispute.
“The essence of the trade war is that the US is unhappy with China as an emerging superpower, especially China’s technology and the ‘Made in China 2025’ campaign,” Shi said.
“China has been a great manufacturing nation for so long. We have to focus more on scientific research for the next stage, and nothing will stop China from proceeding with its Made in China 2025 programme.”
China and the US have been locked in a protracted trade war since July, when Washington began imposing tariffs on Chinese imports and Beijing responded in kind. Although the US last week decided to postpone planned tariff increases and US President Donald Trump will meet Xi later this month in Florida to push forward a trade deal, the dispute has already had an impact on the Chinese economy. China’s manufacturing activity last month dropped to its lowest level since January 2017, and export demand also went down.
Still, many delegates were tight-lipped on the issue, which is deemed sensitive by Beijing.
Bombarded with questions about the impact of the trade war on China’s economy and the yuan exchange rate policy, Bai Chongen, an economist with Tsinghua University and a former adviser on central bank monetary policy, kept his answers brief, saying: “I don’t know”, “I cannot predict”, and finally, “I have to go”.
Meanwhile, Li Youxiang, vice-president of the Yunnan CPPCC, said only that he was “yet to consider” the trade war’s impact on the Chinese economy. When asked when he might finish considering the matter, he said: “Maybe tomorrow”.