As trade war with United States rages on, China looks inward to keep economy rolling

With no sign of a let-up in the trade war with the United States, China’s top leaders are looking inward for new growth drivers in a move that could affect the nation’s economic trajectory in the years ahead.

While Beijing is keen to attract foreign investors by trumpeting its efforts at “opening up”, it is also preparing for the possibility that growing international hostility might make it tougher to sell products to and acquire advanced technology from the US and other wealthy nations.

In a white paper issued late last month, China said it planned to revitalise its domestic market by making its rust belt and vast countryside more self-sufficient.

In his first public statement on what China should do to cope with growing hostility in the outside world, Chinese President Xi Jinping said last week that rising unilateralism and protectionism was forcing China to become more self-reliant, and “it’s not a bad thing”.

Xi made the assessment during a visit to a state-owned factory in the rust-belt region of northeast China, which borders Russia and was once a base of the planned economy but is now the sick man of the economy.

During his visit, Xi said the government would continue to back state-owned enterprises (SOE) to make them “bigger and stronger”, despite complaints from Washington and Brussels that they distort market competition.

According to Chinese government statements, academics and analysts, the message that China must “eventually rely on itself” suggests the emergence of a more inward-looking strategy, which in turn is a product of the perception that the US is trying to thwart China’s rise and that the trade war is just an element of that.