China Signals Stability Amidst Rising US-China Tensions

Amidst escalating trade tensions with the US, China's top leaders are projecting confidence and offering reassurances to foreign businesses, Nikkei Asia reports.

In a speech to dozens of executives from major multinational corporations, including Apple, Qualcomm, and Boeing, Premier Li Qiang pledged unwavering support for economic growth, even as the country navigates a complex global economic landscape.

"In the face of possible unexpected shocks that mainly come from external sources, new incremental policies will be introduced as necessary to ensure the stable operation of the economy," Li stated at the annual China Development Forum, which kicked off on Sunday.

His comments come just over a week before President Donald Trump is expected to announce reciprocal tariffs on goods from several countries, including China, marking a potential escalation of the ongoing trade war.

Since Trump's return to the White House in January, the US has raised tariffs on Chinese exports by 20%, citing concerns over illegal drug trafficking. China retaliated with targeted tariffs on US agricultural goods and export controls on American companies.

Analysts see the positive messaging from Chinese officials as an attempt to bolster confidence and stimulate domestic consumption and investment, offsetting softening export growth.

"Clearly, authorities recognize that the economy remains highly vulnerable," said Dan Wang, China director at Eurasia Group. "There was not a single word of deterrence or threat from the speech. They are doing all they can to help stabilize expectations."

While the Chinese economy started the year relatively strong, with consumer spending and investment on the rise, weak spots are emerging. Export growth fell sharply in February, even before the latest US tariffs took effect. Housing sales remain sluggish, and youth unemployment continues to rise.

This year's China Development Forum has attracted over 100 delegates, including top American executives whose companies rely heavily on the Chinese market. Attendees include Tim Cook of Apple, Cristiano Amon of Qualcomm, and Stephen Schwarzman of Blackstone. Prominent scholars, including American economist Stephen Roach and former Bank of Japan Governor Masaaki Shirakawa, are also in attendance.

Chinese authorities have made a concerted effort to reassure both domestic and foreign private entrepreneurs, following concerns stemming from Beijing's recent crackdowns on internet companies and private education providers.

Foreign investors have also expressed apprehension about China's growth prospects and tightening regulations, leading to a record capital flight last year. To address these concerns, Premier Li promised the passage of new laws to support the private sector, improvements in the rule of law, and continued efforts to improve market access for companies from all countries.

Friction between China and the US has intensified in recent weeks following the announcement of a $22.8 billion sale of stakes in dozens of ports, including two at the Panama Canal, from Hong Kong billionaire Li Ka-shing's conglomerate CK Hutchison to a consortium led by US asset manager BlackRock. Chinese authorities have expressed disapproval of the deal through state-backed media outlets.

BlackRock CEO Larry Fink, a regular attendee of the forum in previous years, was notably absent from this year's gathering. Richard Li Tzar-kai, the younger son of Li Ka-shing and chairman of investment firm Pacific Century Group, was on the guest list.

In a separate meeting with US Senator Steve Daines, a Trump supporter, Premier Li described US-China relations as being at a "critical juncture" and expressed hope for cooperation rather than zero-sum competition.

"There is no winner in a trade war," Li told Daines. "We should address trade imbalance and other issues by making the pie bigger in collaboration."