Chinese vice-premier Ding Xuexiang has pledged to give stronger policy support to the Chinese economy as he delivered the keynote speech at a forum focused on bolstering the country’s role in Asia and ties with the global south.
With the tariffs on Chinese goods mounting, China is trying to find a foundation for growth that does not rely on an increasingly capricious United States. At the Boao Forum for Asia, a conference in south China’s Hainan province, Chinese officials and academics stressed the need for partnerships with global south countries. Despite its rapid economic growth in the past three decades, China still identifies as being part of this group.
Ding, China’s sixth-ranking official, said on Thursday that policies would be implemented this year to “stabilise foreign trade and investment”.
At the Boao Forum, an annual business and political summit, the line-up of speakers reflected China’s diplomatic pivot towards low- and middle-income countries. The only head of state to participate was the Laos prime minister, Sonexay Siphandone, while the deputy prime ministers of Russia and Kazakhstan also attended. One panel featured a senior Iranian official who was reportedly involved in talks for Iran to acquire ammonium perchlorate, an explosive agent used in missiles, from China. The official told the Guardian he did not remember the reports and had not been involved in the negotiations.
“The US is never on the side of the global south,” said Aravind Yelery, an associate professor at Jawaharlal Nehru University, on one panel, adding that countries like India should look “within the global south” for economic support. Yelery’s comments came as the Indian government is said to be in discussions about relaxing restrictions on Chinese trade and investment, which were put in place five years ago after clashes at the India-China border.
US tariff resilience
A major theme at Boao was how Asian economies could improve their resilience against US tariffs. Ding said that countries should “resolutely oppose trade and investment protectionism”, a reference to the US levies.
Zhang Yuyan, an economist from the Chinese Academy of Social Sciences, warned that the “major turbulence” of US policies would affect Asian economic outlooks, although he, along with a group of other researchers, nonetheless predicted Asia’s GDP growth would be 4.5% in 2025, a slight increase on 2024’s growth figures, in a report released on Tuesday.
Huang Yiping, an economist from Peking University and an influential adviser to the People’s Bank of China, stressed the importance of countries co-operating without the US. “Barriers for trade are rising very quickly,” he said, warning that US-led globalisation could go into reverse.
The comments come a few months after Xi Jinping, China’s leader, unveiled a raft of measures to support global south countries at the G20 summit in Brazil last year.
China now has more than a dozen free trade agreements with global south countries, and the share of its exports bound for the US is shrinking, down to around 13% in 2023. But experts have noted that rising exports to South-east Asian countries may just represent companies shipping goods to the US via third countries to avoid tariffs. “A significant part of China’s trade with the global south is derivative of US demand,” said Brad Sester, a senior fellow at the Council on Foreign Relations, in an interview earlier this year.
But for all the talk of deepening trade – and political – relations with global south countries, many economists believe that the real answer to tariff-proofing China’s economy lies in domestic demand. Policymakers expect exports to contribute little to China’s growth this year, meaning that they will have to turn to other levers to reach the 5% GDP growth target. As well as stabilising foreign investment, Ding said China would find ways to “comprehensively” expand domestic demand. Several provinces have been told to focus on boosting consumption rather than investment, although the mechanisms for doing this remain unclear, as many ordinary Chinese people still choose to save a higher share of their incomes than global averages.
Huang, the Peking University economist, addressed this explicitly at Boao. “The priority for China is to boost domestic demand,” he told the forum, with another economist arguing that China should take steps to boost consumption’s share of GDP to 70% by 2035.