China faces multiple challenges amid ‘rising uncertainties’

BEIJING (AP) — A top Chinese leader warned Friday of “rising uncertainties” and pledged tax cuts to shore up growth as the potential economic and geopolitical fallout from Russia’s invasion of Ukraine loomed over an annual meeting of China’s ceremonial legislature.

Premier Li Keqiang described the situation in Ukraine as “grave” and said the pressing task is to prevent the crisis from escalating and getting out of control. China has stood apart from much of the world in refusing to condemn Russia’s military action, or even call it an invasion.

On China’s economy, Li said that after an 8.1% expansion last year, achieving a growth target of 5.5% this year would not be easy.

“This year we are faced with new downside risks and challenges,” he said at a news conference after the closing session of the National People’s Congress. “There are a lot of complexities, changes, and rising uncertainties.”

The annual meeting of more than 3,000 deputies — cut from two weeks to one because of the pandemic — took place against the backdrop of a surge in new cases in many parts of the country.

The northeastern city of Changchun, home to 9 million people, was locked down Friday. To the south, China’s largest city, Shanghai, ordered all schools to switch to online classes starting Saturday.

Li said that China would make COVID-19 control measures more targeted to ensure normal economic production and life but gave little sign of abandoning the “zero-tolerance” strategy that has limited travel to and from China and quarantined anyone arriving for two to three weeks.

“We will continue to gain experience, respond to possible changes in a timely manner and gradually work toward the free flow of goods and personnel,” he said.

While the Congress does little legislating beyond rubber-stamping some broad policies, it does serve as a sounding board for public concerns. Several proposals were put forth this year to increase penalties for human trafficking, following an outcry over reports of a mother found chained in a shed.

“Recently, there has been an incident of gross violations of women’s rights,” Li said, without mentioning the details. “We are not only distressed for the victims but also indignant about the incident.”

Li, whose primary responsibility is the economy, said the government would enact business tax and fee cuts and tax refunds totaling 2.5 trillion yuan ($400 billion), especially for small entrepreneurs. Many have been hit hard by the pandemic.

He also repeated calls for the U.S. to repeal tariffs put on Chinese imports under previous U.S. President Donald Trump. The two sides should communicate more following a video summit late last year between their presidents, Xi Jinping and Joe Biden, he said.

“Since the two sides have opened the door to each other, then it should not be closed,” he said. “Nor should there be decoupling.”

The U.S. accused China this week of aiding Russian disinformation efforts, including unsubstantiated claims that Ukraine was running biological weapons labs with U.S. support.

Foreign Ministry spokesperson Zhao Lijian said that China “urges the U.S. to disclose details on U.S.-financed biological labs in Ukraine.” U.S. State Department spokesperson Ned Price called the allegations “outright lies.”

Li, who is considered the ruling Communist Party’s No. 2 official after Xi, said he would step down when his second five-year term ends next year. Xi, however, is expected to break with recent tradition and remain in power for a third term.

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