China embarks on its pivotal two sessions with a renewed wave of confidence and national pride, particularly in its burgeoning tech sector. This annual political gathering in Beijing is set against a backdrop of shifting global dynamics, where China sees itself potentially replacing the United States in certain spheres of the world order. As Beijing gears up to tackle challenges within its tech industry, signs of policy adjustments since last summer indicate a significant strategic shift. In the global electric vehicle market, China’s top manufacturer is fiercely competing with Elon Musk’s Tesla, showcasing China’s ambition to lead in high-tech innovation.
Xi Jinping, China’s most powerful leader in decades, has urged the nation to "face difficulties head-on and strengthen confidence" amidst growing external challenges. With an emphasis on innovation, China plans to release policies supporting the high-tech sector, recognizing it as the most viable path for economic growth. The traditional model of infrastructure-driven expansion is no longer sustainable, prompting a pivot towards self-sufficiency in advanced technologies.
"The NPC this year will really be in the context of continuing to derisk China’s rise and really hardening its posture against global uncertainties," – Nis Grünberg
China's leadership is expected to prioritize investments in cutting-edge fields such as high-end chips, quantum computing, robotics, and artificial intelligence. These sectors are seen as vital for powering economic growth and upgrading Chinese manufacturing capabilities. Beijing's strategy also includes boosting consumer spending through potential stimulus measures or social welfare benefits to counterbalance the slowing economy.
The two sessions gathering will reflect Xi Jinping's increasingly firm hold over China's political system. This comes at a time when the United States considers expanding restrictions on American investments in sensitive Chinese technologies and curbing Chinese investments in strategic American sectors. Despite these challenges, China's subsidized companies remain resilient, banking on the dependency of U.S. industries on Chinese goods to weather U.S. tariffs.
"to give full play to their capabilities" – Xi Jinping
Beijing’s focus on technological advancement aligns with its broader ambition to replace the United States in various aspects of global leadership. As the world's second-largest economy grapples with a property sector crisis, high local government debt, and declining foreign investment and consumption, innovation in the high-tech sector emerges as a critical engine for economic rejuvenation.
"China needs to find a new engine for its economic development. The old model, the big infrastructure, construction–driven (one), is probably not going to work … and (the high tech sector) is the most feasible path China has," – Liu Dongshu
China's electric vehicle industry stands as a testament to its potential leadership in tackling climate change. By positioning itself at the forefront of this technological revolution, China aims to establish electric vehicles as a signature policy for addressing environmental concerns. This strategic move underscores China's broader aspirations to lead globally in other areas like artificial intelligence.
"China may think that since (DeepSeek’s success) it can be the leader in global AI over the US, or similarly in areas like climate change, where electric vehicles might be China’s signature policy to solve the climate change problem," – Liu Dongshu
The Chinese Communist Party maintains authoritative control over the country, with Xi Jinping steering its course toward a tech-driven future. As Beijing prepares to unveil new efforts to stimulate consumer spending amidst a slowing economy, it remains undeterred by external pressures.
"So in a sense they’re not afraid of (them)," – Victor Shih
