Tariff reactions and Two Sessions
Stable GDP, bubble tea billions, and Uyghurs deported from Thailand
This is The China Week, a succinct roundup of what happened in the world’s other superpower in the last week.
I also worked on these things this week:
Xi Jinping’s Purges Have Escalated. Here’s Why They Are Unlikely to Stop by Wu Guoguang on ChinaFile.
The second episode of my new podcast series, Rhyming Chaos: How to loot a country: Lessons for the U.S. from South Africa.
The China Week is free for the next few weeks—subscribe here if this was forwarded to you.
—Jeremy Goldkorn
Top story
Beijing reacts to Trump’s tariffs
Donald Trump’s new tariffs on China, Mexico, and Canada kicked in today. Goods from China were already subject to 10% duties after a February executive order from Trump; this has been increased to 20%. China’s response includes:
Additional 10% to 15% tariffs on eight categories of U.S. agricultural products, including soybeans and corn.
Adding 10 defense companies (which have no business in China) to China’s Unreliable Entity List, adding 15 U.S. military and aerospace companies to China’s Export Control List, and launching an “anti-circumvention investigation into certain optical fiber products imported from the United States.”
What’s next? Who knows. Beijing has other levers to pull, and much depends on the Trump administration’s next moves. But with China’s noisiest political meeting taking place over the next ten days or so (see below), we can expect messaging to be restrained and focused on projecting stability.
Political theater
Stable GDP: China’s Two Sessions
The annual "Two Sessions" political meeting began in Beijing today. While it is rare for anything genuinely interesting to happen or be said at this yearly gathering, there are occasional announcements of significance. For example, in 2023, Xi Jinping was sworn in for a norm-busting third term as China’s national leader (known as “chairman” 主席 in Chinese, and “president” in English).
What will happen this year? Probably not much.
On the economy
The authors of Beijing Scroll, who are well connected to China’s state and Party messaging apparatus, say that “many analysts predict” that “China will set a similar GDP growth target for 2025” as it did at the 2024 Two Sessions: “around 5 percent.”
Will there be stimulus announcements? Maybe, but seasoned observers expect to be underwhelmed. However, there will probably be follow up to recent encouraging noises directed at the private sector.
One thing to watch: the research firm Trivium highlighted a December Xi Jinping speech that framed weak demand as a threat to economic security threat. If this is the thinking at the top, there might be announcements of policies to encourage consumption.
On foreign policy
An editorial from the Party-run Global Times about the Two Sessions compares China’s “pragmatic…democratic politics” with “empty talk democracy.”
Beijing Scroll mentions that China’s Foreign Minister Wang Yi 王毅 is likely to give a speech at the Two Sessions, and that he recently “cited a quote from a popular martial arts novel to illustrate China's position in handling its ties with the United States: “Let the strong do as they will; we remain as unperturbed as the gentle breeze caresses the hills” 他强任他强，清风拂山岗；他横任他横，明月照大江.
These, then, are likely to be the two messages on foreign policy from the Two Sessions: China’s political process is orderly and democratic (compared to other unnamed countries!), and China will be a rock of stability as other unnamed countries tear themselves apart.
What should you watch as the Two Sessions goes on?
Nothing, unless you are obsessive about Chinese political theater.
As the meetings start winding up next week, there will be news reports and government information releases that will tell you everything important, and I’ll summarize the important developments in this newsletter in the next two weeks.
If you’re jonesing for a daily dose of Two Sessions reporting, I’d follow Beijing Scroll, NPC Observer, Tracking People’s Daily, and Sinocism.
Investing, trends, economics
Billions of dollars in bubble tea
Mixue 蜜雪冰城, a Chinese franchise chain with more than 45,000 stores that sells ice cream and sweet drinks, raised more than $400 million in an initial public offering of its shares in Hong Kong on March 3. The stock ended the day 43% above its IPO price, giving Mixue a valuation of more than $10 billion, although it is down a little today.
Transnational repression
40 Uyghurs deported from Thailand
Thailand deported 40 Uyghurs back to China after holding them for years, apparently more than a decade, because they had entered the country without visas, and “no other third country had stepped forward offering to take them [including] Turkey, which has given Uyghurs asylum in the past.”
The family of one of the deported Uyghurs called the decision “shameful”.