The two cups of tea that accompanied President Xi Jinping during the annual session of the National People’s Congress, while the rest only had one, could be considered a further sign of further consolidation of power after reasserting himself for an unprecedented third term. Above the the details, the priorities of the roadmap for the next five years mark challenges regarding economic and technological self-sufficiency the Chinese president will face, with a Cabinet of loyalists and under a greater consolidation of power.

The growing geopolitical tension with the United States has led Xi Jinping, for the first time, to mention the Western power by name, focusing the axis of the strategic plan that will govern the next five years. In addition to the trade war without significant gains, there has been growing pressure on China’s technological aspirations, which already has the backing of several of the most important players among the world’s technological elite, both Asian and European, not to mention the scenario of lessons learned from the invasion of Ukraine should the situation regarding Taiwan change.

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The real challenge posed by China in the Pacific has led Beijing to seek to strengthen its military capabilities and strategies in the face of a possible conflict for which the United States might not be prepared, according to some analyses, thus guiding internal debate in Washington during the last few months. Moreover, China’s growing assertiveness, both regionally and globally, has led to the prioritisation of increased defence spending and diplomatic action.

China’s defence budget for 2023 will more than double the modest 3% growth forecast estimated for the economy, increasing defence spending to 7.2%, reaching $224 billion. This consolidates the trend of successive defence budget increases over the past eight years, incorporating the perspective of the Ukraine effect and lessons learned. The celebration of the centenary of the People’s Liberation Army (PLA) in 2027 requires 'boosting combat readiness and improving military capabilities,' as commented by now former Chinese Premier Li Keqiang, promising a 'peaceful reunification' with Taiwan in his opening speech at the annual meeting of China’s Parliament.

Although China has the largest army in the world in terms of active military personnel, exceeding two million, the United States is the country that allocates the largest budget to military spending, about $800 billion in 2021, almost three times China’s budget. It would be twice as much when considered as a percentage of GDP, 3.48% for the United States compared to 1.74% for the Asian giant. It is to be expected that, in an era of great competition, defence spending will follow an upward trend, with single-digit growth with a view to completing the military modernisation process scheduled for 2035, incorporating advances in missile technology and artificial intelligence.

The priority given by Xi to upgrading China’s defence forces in the closing speech of the 'two sessions,' as it is commonly known, reflects the state of heightened confrontation with the United States in recent months, and reaffirms the government’s willingness for defence spending to outpace the estimate of economic growth. In the speech, in addition to urging the country to accelerate technological self-sufficiency and innovation capabilities, and promote industrial transformation, he pledged to 'unswervingly advance the reunification process' with Taiwan, thus China 'enhance[ing] the ability to maintain national security.'



Within the overall framework of improving strategic capabilities, the strengthening of diplomatic action comes in addition to efforts in military spending, as China is aware of the long-term challenges, to which the world’s major leaders are no strangers. Hence, along with defence spending, efforts in diplomatic action are also a priority, increasing spending by 12.2% to strengthen international outreach after the long lethargy that the zero-covid policy has meant for Chinese diplomacy.

Development and security as the two key issues for building a strong country. In fact, while the strategy of the newly appointed Premier, Li Qiang, advocates a trade understanding with the United States, the greater control that Xi will exercise over security and technology is a forerunner of the government’s main priority for the next five years. In this time, the PLA’s centennial celebration will have to fulfil the mandate to address all possible security challenges, hence the growing narrative of a possible conflict over Taiwan from 2027 onwards.

For the first time, Xi has mentioned the United States in his speech, referring to the effect that blockades on the semiconductor industry have on Chinese development, bringing tension with Washington to an unheard-of level. De-escalating the tension, with Europe as a global player, is becoming increasingly necessary.