Key takeaways:

• China sets a challenging economic growth target of around 5% for the year.
• The U.S. has imposed new tariffs on Chinese imports, escalating trade tensions.
• China is prioritizing domestic consumption to counter external pressures.
• The Chinese government emphasizes support for its private sector and technological advancement.

SINGAPORE: China has reiterated its commitment to achieving an economic growth target of "around 5 per cent" for 2025, as it grapples with the ramifications of ongoing trade tensions with the United States. Premier Li Qiang's recent remarks came during the opening of the National People's Congress, where he acknowledged the challenges the world’s second-largest economy faces, including a burgeoning trade war and sluggish domestic demand.

In the face of increasing tariffs, including a new wave of U.S. duties that has raised tariffs on Chinese imports to 20%, Beijing has vowed to pivot to domestic consumption as its primary growth driver. "We have full confidence that we can achieve our growth targets," said Zheng Shanjie, Chairman of China's National Development and Reform Commission. Despite this assertion, many analysts remain skeptical about the feasibility of this target given the broader economic landscape characterized by declining consumption, rising youth unemployment, and heightened international pressures.

The Chinese government has emphasized the importance of boosting household spending, a notable shift in focus from technology and industrial production. Premier Li underscored this by mentioning "consumption" multiple times in his policies aimed at revitalizing domestic demand, though he also warned about "increasing uncertainty" stemming from the global environment.

Recent fiscal measures include an increase in budget deficits and support for private enterprises, signaling Beijing's intention to provide a cushion against external shocks as it faces significant economic challenges exacerbated by tariffs that have already hit hundreds of billions in trade.

While emphasizing the resilience of the Chinese economy in the face of tariffs, analysts note that the country has experienced a complete restructuring of its growth model in recent years, relying heavily on state-driven investments—many of which pivot towards technological advancements and fostering the private sector. Reports suggest an increase in defensive military spending, which some experts interpret as both a necessary measure amidst the U.S. trade aggression and a method of displaying strength in a politically complex environment.

Moreover, the Chinese Ministry of Foreign Affairs issued statements reflecting a tough stance against perceived threats, stressing their readiness to confront any escalated conflict with the U.S., marking an increasingly aggressive tone as leaders navigate the complexities of modern geopolitics. This rhetoric continues as China prepares retaliatory trade measures against increased tariffs, pledging support for affected sectors.

As the situation develops, the dual challenges of rising international tensions alongside structural economic reforms pose a substantial test for China's policymakers, who aim to stabilize the economy while maintaining growth amid deepening uncertainties.

For detailed insights, refer to the original reporting from Channel News Asia, Reuters, and India Times.