China deplores Western calls to cut economic ties

“Everyone is intertwined”: Chinese Premier Li Qiang in a speech on Tuesday deplored Western calls to reduce dependence on his country, seeing it as a “false proposal”. The head of government and second figure of the state, who in China is more specifically responsible for economic issues, also insisted on the need to "cooperate", the only way according to him to generate growth and prosperity.

His speech, delivered at the opening of the World Economic Forum in Tianjin (north China), known colloquially as "Summer Davos", comes at a time of defiance in the West over economic dependencies on screw the Asian giant. The European Commission thus unveiled last week its strategy to respond more firmly to the risks weighing on its economic security, with China in particular in the crosshairs.

Germany, where Li Qiang was recently on an official visit, said it wanted to diversify its partners to "reduce the risks" linked to its great dependence on China. Other Western countries have also adopted similar positions, like the United States, which, for example, is pushing its Western allies to reduce their dependence on Chinese technologies in the name of national security. “In the West, some people are pushing the principle that we should reduce dependence, eradicate risks,” the Chinese premier said on Tuesday. "These two concepts are a false proposition, because with the development of globalization, the world economy has become a community where everyone is intertwined," he said. “The economies of countries are intertwined, interdependent, prospering each other and growing together. This is basically a good thing, not a bad thing!”

Brussels wants to find its own economic position vis-à-vis Beijing, despite pressure from the United States for a hard line. Against the backdrop of the Beijing-Washington rivalry over semiconductors, the United States has imposed restrictions on China's access to high-end chips since last year. They also prevent dozens of Chinese companies from acquiring American technologies. But Washington is not trying to “stop” Chinese development, US Secretary of State Antony Blinken assured last week during a visit to Beijing. This edition of the World Economic Forum is the first to be held in China since 2019 due to the Covid pandemic. It will last until Thursday.

Li Qiang also uttered the word "cooperation" countless times on Tuesday. "There are still many global challenges and difficulties ahead of us, such as climate change, debt risk, slowing growth, gaps between rich and poor," Li said. the series of major problems facing humanity (...) mutual cooperation is necessary,” he insisted.

Li Qiang also showed his optimism about the Chinese economy on Tuesday, despite a loss of steam in the recovery in the world's second largest economy. Chinese GDP (gross domestic product) grew by 3% last year, far from the official target of 5.5%, and at one of the weakest rates in four decades.

For 2023, this target has been set at “around 5%” by the government. "This year, we hope to be able to achieve (this) growth target," the Chinese premier said on Tuesday. These remarks come at a time when the world's second largest economy is facing many difficulties. The long-awaited post-Covid recovery after the lifting of health restrictions at the end of 2022 has tended to run out of steam in recent weeks. The economy is being penalized by the over-indebtedness of the real estate sector (a traditional pillar of growth), sluggish consumption in a context of uncertainty on the labor market and the global economic slowdown which is weighing on demand for Chinese goods.

To stimulate activity, the central bank has made several rate cuts in recent weeks, at a time when many economists are pleading more for a stimulus plan. But the authorities seem to be ruling out this option for the time being, in favor of targeted measures.