As Trump is preparing to visit China

In early March, China’s legislature, the National People’s Congress (NPC), will convene for its annual meeting, which will last about a week. This year’s NPC will be especially consequential because Xi Jinping will roll out the next five-year plan for China’s development. It will lay out Xi’s ambitions through the end of the decade and will emphasize his goals for China’s high-tech and advanced manufacturing sectors. The meeting will also occur just weeks before Trump is set to visit Xi for a much-anticipated meeting, the first time a U.S. president will meet Xi in China since Trump’s last visit in 2017.

The NPC’s rollout of its 15th Five-Year Plan will underscore the continuity in China’s domestic and economic policy as Xi rounds the corner into an all but guaranteed fourth term next year. The economy-focused outcomes of the NPC meetings are likely to produce few surprises but will offer a clear statement of Beijing’s economic priorities. The leadership’s emphasis is a dogged pursuit of high quality, if slower, growth in leading-edge manufacturing arenas. These targets are designed not only to bolster the economy but also to address economic security competition with the U.S. They will also seek to set China up as a major future innovator. The plan has two core components. First, it will continue investments in upgrading the technology base, especially artificial intelligence (AI), but also quantum, biomanufacturing, nuclear fusion, and 6G mobile. China further has prioritized investment in emerging technologies in new energy, new materials, aviation, and, the low-altitude economy, not only drones but also flying taxis and other components and services operating within 1,000 meters of ground level.

Second, Beijing seeks to deepen self-sufficiency in technology. Beijing’s painful lesson from U.S. export controls is China’s need to prioritize self-sufficiency, especially in semiconductor chips. Complementing technology self-sufficiency will be nods to food and energy security, which were emphasized in the previous five-year plan.

China’s growing technological prowess could be the engine for future economic growth and geopolitical power. China is already at or near the global technological frontier in AI, electric vehicles, batteries, autonomous vehicles, and robotics. Gone are the days when China’s main competitive edge was low wages and lax environmental standards. China now boasts world-class research institutions and leading technology companies with an increasingly global reach. The new Five-Year Plan will likely spell out the targets and pathways for China to strengthen its ability to innovate at the cutting edge and reduce dependence on foreign inputs, in particular from the U.S. Beijing believes that its centralization of power in Xi gives him a stronger hand to play with Trump. Never has there been such a high-profile parade of world leaders traveling to China ahead of a U.S. presidential visit, in particular from Europe. Not since Richard Nixon has there been an American leader as eager to travel to China as Trump.

Trump will travel to China from March 31 to April 2 for a highly anticipated meeting between the leaders of the world’s two biggest economies. Trump’s talks with Xi Jinping on an extended visit to Beijing had been expected to revolve around extending a trade truce that kept both countries from further hiking tariffs. The Trump administration has said the global tariffs were necessary because of national emergencies related to trade imbalances that have weakened U.S. manufacturing. Trump had already been playing defense in the trade war, given the effectiveness of Beijing’s threat to cut off rare earths.  Trump’s visit will be the leaders’ first in-person talks since an October meeting in South Korea, where they agreed on the trade truce. Other items on the table will likely be Taiwan, Ukraine and Iran. Both countries are still too dependent on each other to rock the boat and create more of a conflict. From the U.S. perspective, China can and should not be trusted and they are engaged in finding a way to be less dependent on China and China is doing the same. They are trying to build their own supply chains, grow the use of its currency globally and building stronger ties with other countries, in particular in Europe and in the Global South, emerging markets. The polarization and fragmentation will likely continue.