In the face of trade tensions, China says it will focus on its own economy

BEIJING — Top Chinese officials on Friday emphasized the country would focus on its own affairs in the face of rising trade tensions.

“As long as we do our own things well, we can ensure the national economy can run smoothly and steadily move forward,” Han Wenxiu, deputy director at the Chinese Communist Party’s central committee office for financial and economic affairs, told reporters in Mandarin, translated by CNBC.

He listed three areas of focus: the stable and healthy development of the real estate market, accelerated development of “emerging and future industries” and expanding domestic demand, “especially consumption.”

Han was responding to a question about how China would support growth in the face of increased trade tensions. He used a phrase attributed to Chinese President Xi Jinping, who in recent years has called for the country to “do your own thing well” and focus on its own affairs.

The press conference followed the end of a high-level meeting policy called the Third Plenum that ended Thursday. While the final resolution has yet to be released — and is expected in the coming days — the initial communique called for boosting domestic tech and achieving the full-year economic targets.

Trade tensions between the U.S. and China escalated under former U.S. President Donald Trump, who is running for reelection this fall and has threatened 60% tariffs on Chinese goods if he wins. The Biden administration this year increased tariffs on Chinese electric cars to 100%.

The European Union this month also announced it would raise tariffs on Chinese-made electric cars.

China’s Third Plenum readout and officials’ comments Friday did not name specific countries or regions, but referenced geopolitical tensions in broad strokes, including what Han called a “temporary” dip in foreign direct investment.

“External uncertainties have increased, but they will not impact China’s commitment to and confidence in continued deepening of reform and further opening up,” Mu Hong, deputy director of the Party’s central committee office for “Comprehensively Deepening Reform,” told reporters Friday.

China has used “reform and opening up” to describe policies of the last 40 years that gradually opened the economy to foreign and private capital, among other changes to the communist state.

After decades of rapid economic growth, China’s expansion has slowed. GDP growth missed expectations in the second quarter, prompting some analysts to call for more stimulus if the country is to reach its full-year target of around 5% growth.

While exports have held up as a growth driver, a real estate slump and lackluster consumption have weighed on the economy. Beijing’s longer-term efforts to build up advanced technology have yet to fully offset the drag from those sectors.

Han, who is also director of the Office of the Central Rural Work Leading Group, on Friday acknowledged the “systemic impact” of real estate on China’s economy. He said China would continue to work on absorbing existing housing inventory while “optimizing” new construction, and delivering pre-sold homes.

Investment in real estate dropped by 10.1% in the first half of the year, with residential sales down by well over 20% from a year ago.

Han in a separate response on Friday said the economy faced some challenges, and called for “stronger, more effective macro policy.” He did not specify a timeframe.

When giving an introductory outline of the plenum’s resolution, Han said it included plans to improve the macroeconomic governance system and further integrate the development of urban and rural areas.

“We must ensure that [the resolution] is implemented and effective,” he said at the end of those opening remarks.

— CNBC’s Sonia Heng contributed to this report.