Ahead of expected trade negotiations with the United States and the European Union, China is signaling that it does not intend to fundamentally alter its economic course, which is centered on manufacturing and high-tech industries. Beijing rejects Western accusations that state subsidies and excess production capacity distort global competition.
At the end of July, the Politburo of the Chinese Communist Party endorsed the continuation of the current economic policy. The leadership emphasized the need for targeted support and stronger domestic demand but did not unveil a new package of large-scale stimulus measures or structural reforms.
According to China’s Ministry of Commerce, allegations of overcapacity are being used to justify discriminatory trade measures against Chinese companies. Beijing argues that industrial and technological development is essential for narrowing the economic gap with advanced economies.
The United States and the European Union, however, maintain that state support, weak domestic demand and the rapid expansion of production capacity give Chinese companies a price advantage in foreign markets. Brussels and Washington identify subsidies, market-access barriers and unequal competitive conditions as key concerns.
Despite its firm rhetoric, Beijing is seeking to address certain domestic imbalances, though it is not considering major concessions. According to Reuters, China is drawing “red lines” ahead of negotiations with the West, signaling which aspects of its economic policy it is unwilling to change.
