China’s leadership has pledged to enhance energy security while focusing on rapid technological development and self-sufficiency, especially as the U. S.-Israeli conflict affects the economy. The economy grew by 5.0% in the first quarter, meeting the targeted range of 4.5% to 5.0%, indicating resilience due to ample oil reserves and a diverse energy mix. However, rising energy and raw material prices pose challenges, increasing production costs and squeezing factory margins, which support millions of jobs. A weakening global economy may also reduce demand for Chinese exports.
The Politburo highlighted that the economy began the year stronger than expected but stressed the need to address external shocks and uncertainties while guaranteeing energy resources and ensuring high-quality development. High-quality development aims for scientific and technological advancements to boost China’s position in value addition. Economist Zhiwei Zhang noted economic momentum might slow in the second quarter due to external uncertainties and energy prices. The Politburo called for accelerating a modern industrial system and increasing artificial intelligence adoption, while seeking self-reliance in technology and supply chain control.
In its recent five-year plan, China has prioritized technological dominance and localized supply chains as national security goals. While there is acknowledgment of the need to increase consumption, stabilize the property market, safeguard jobs, and reduce industrial overcapacity, these goals appeared less prominent in the statement, indicating an emphasis on industrial and technological advancement. Analysts pointed out China’s strong resources give it an edge over Europe and Asia during this disruption, although the country faces challenges without any immediate plans for additional stimulus, though fiscal or monetary easing may occur if negative export growth develops.
With information from Reuters
