Stabilization and ‘Struggle’: Strategic Signals from April’s Politburo and Trade Meetings

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Image of the Politburo meeting held in Beijing on April 24. (Source: Xinhua).

Executive Summary:

  • April’s Politburo meetings and subsequent policy deployments indicate that Xi Jinping and his fellow Politburo members are scrambling to adapt to a harsher external environment—one marked by persistent U.S. tariffs, accelerating technology decoupling, and slowing global demand.
  • Beijing’s response points toward deeper economic self-reliance and greater strategic mobilization. This entails a potential for more direct and sustained confrontation with the United States.
  • Pressure is growing inside leadership circles beneath a projected image of calm. Yet nowhere in the recent meetings is there any indication that the Party is preparing to negotiate or de-escalate.

At the April 25 Politburo meeting, General Secretary Xi Jinping and senior leaders reaffirmed a dual-track strategy of domestic “stabilization” (稳定) and external “struggle” (斗争) (Xinhua, April 25). Policy guidance emphasized proactive macroeconomic management to cushion growth while also acknowledging mounting “external shocks” (外部冲击) and calling for bottom-line thinking, emergency planning, and political discipline to weather sustained external pressure.

Later on the same day, a Politburo study session on artificial intelligence expanded this dual-track framework to critical strategic sectors. Xi doubled down on elevating AI to a national strategic priority, aligning it with other technologies in which self-reliance is essential to “seizing the initiative” (掌握主动权) in an era of global industrial and technological competition, and to withstanding decoupling and rebuilding long-term resilience (Xinhua, April 26).

The Chinese Communist Party (CCP) leadership is now also repositioning trade policy within this strategic logic. Two meetings that took place the same week focused on building defensive resilience against escalating trade friction while aggressively seeking new international market linkages—another dual approach (Ministry of Commerce News Office, April 25; People’s Daily, April 25). These moves show how Beijing is reframing not only its internal economic management but also its external trade strategy to survive and adapt under conditions of intensifying rivalry.

Beijing Gears Up for Decoupling and ‘Struggle’

The Politburo’s April meeting addressed economic conditions and future economic work—the first of the regular monthly meetings to be dedicated to economic affairs since December 2024 (Xinhua, April 25). [1] As usual, the meeting readout began with a broad situational assessment; in this case the verdict can be summarized as confident but mixed. The Party leadership affirmed that the economy has shown a “positive trend” (回升向好态势) since the beginning of the year, crediting Xi Jinping’s leadership and enhanced macroeconomic coordination across the government. “The overall social situation has remained stable” (社会大局保持稳定), the readout declared, though it also acknowledged that the economic recovery remains incomplete and “needs to be further consolidated” (需要进一步稳固), while warning that the impact of tariffs, decoupling, and slowing global growth is intensifying.

The Politburo signaled a bias in favor of more proactive macroeconomic management through the accelerated deployment of bond issuance and monetary liquidity measures. [2] Equally notable is the meeting’s reaffirmation of stabilization measures telegraphed by Xi Jinping and Premier Li Qiang (李强) the preceding week. These comprised an “incremental” package defined by continuity with existing plans, modest policy fine-tuning, and a strong focus on domestic demand and expectation management rather than large-scale stimulus or sweeping structural reform (Xinhua, April 18). [3]

The meeting came with a geopolitical kicker. Building on weeks of signaling that Beijing is preparing for long-term confrontation with the United States, the Xi-chaired session characterized external conditions as defined by an “international economy and trade struggle” (国际经贸斗争). “Struggle” is a loaded term in the Party lexicon, with connotations ranging from mass mobilization to hybrid war. At minimum, it signals that Beijing views relations with Washington as fundamentally adversarial for the foreseeable future, and that it is prepared to deploy a full spectrum of tools honed during past eras of insurgency and Cold War confrontation. As such, the Politburo’s forward guidance points toward intensifying technology competition, trade decoupling, strategic buildup, and incipient escalation of political and military rivalry as much as it does to prioritizing stability.

Xi Elevates AI as Strategic Priority

The Politburo meeting was followed immediately by its 20th collective study session, which focused on the development and governance of AI. Xi’s speech made clear that AI now sits at the center of the country’s strategic response to escalating competition with the United States, framing it as a decisive technology for national power and linking it to efforts to “seize the initiative” in the global industrial and technological race (Xinhua, April 26). Echoing the strategic competition themes raised earlier that day, he stressed the need to fully leverage the PRC’s “new national system” (国家新型举国体制) to accelerate AI self-reliance and industrial integration.

Self-reliance remains a core objective across the full stack in key technologies. Xi views AI as not merely a growth sector but as a strategic asset—aligning it with the Party’s invocation of “struggle.” At the study session, Xi emphasized the need to accelerate innovation, close gaps (i.e. with U.S. technological leadership), and build a domestically controlled and autonomous AI ecosystem across basic research, hardware, and software systems. To achieve this, the PRC must achieve breakthroughs in core technologies, especially high-end chips and basic software; build a domestically controlled AI stack, including infrastructure (computing power), data resources, and industry-academia collaboration systems; and succeed in using AI to drive transformation across traditional sectors and to develop new strategic industries. These initiatives will require expanded policy support for AI through intellectual property rights, taxation incentives, government procurement, education initiatives, and financial tools tailored to AI companies.

The session also included discussion of the global context of national AI development. It called for strengthening AI risk governance via early warning and emergency response systems while promoting AI as a global public good and pushing for the PRC to shape emerging international AI governance standards, including through technology cooperation with “Global South” countries.

Operationalizing Trade Resilience

Domestic stabilization and strategic decoupling are now two sides of the same strategy. Xi’s elevation of AI to a national strategic priority parallels a new trade doctrine designed to both cushion the economy against external shocks and reposition the PRC for a prolonged period of decoupling, confrontation, and competition with the United States.

At the National Trade Friction Response Work Conference (April 24–25), officials acknowledged that the PRC’s trade frictions had entered a “high-intensity” (高强度阶段) phase (Ministry of Commerce News Office, April 25). In language closely mirroring the Politburo’s broader warning about external shocks, vice minister of commerce Yan Dong (鄢东) emphasized the need for “bottom-line thinking” and “extreme thinking” (极限思维) to prepare for worsening tariff fallout while upholding national security and strategic interests. The meeting called for officials at all levels to strengthen political determination amid escalating trade frictions, systematically anticipate and manage trade conflicts, and contribute to the “high-quality development” (高质量发展) of the PRC’s trade structure.

Also on April 24, Politburo member and vice premier He Lifeng (何立峰) launched a complementary initiative at a special action deployment meeting on cross-border trade facilitation. He’s remarks made clear that while direct U.S.-PRC trade relations are likely to deteriorate further, Beijing intends to anchor its trade strategy in expanding ties with non-U.S. economies and bolstering the competitiveness of its exporters. He stressed the importance of “unswervingly expanding ‘opening up’” (不移扩大对外开) to “win the initiative through cooperation” (以开放合作赢得发展主动). Key directives included improving port and customs efficiency, expanding international trade networks within Beijing’s “circle of friends” (朋友圈) to offset U.S. restrictions, deepening rule harmonization and mechanism alignment to stabilize trade relations with foreign countries, and expanding free trade pilot zones nationwide to rapidly improve national trade infrastructure.

Conclusion

The leadership is recalibrating trade and economic policy under duress, even if it avoids publicly framing these moves as reactive. A visible narrative of stability conceals a growing strategic scramble to mitigate vulnerabilities exposed by accelerating decoupling. Signs of underlying strain are already visible. Over 4,400 auto dealerships closed in 2024 amid a brutal price war and a disruptive shift toward new energy vehicles (NEVs), highlighting instability in sectors where the PRC is nominally leading (Yuan Talks, April 21).

Beijing projects confidence in its stabilization efforts but the ultimate success of its trade strategy will hinge on factors it cannot fully control; most critically, sustained external demand. He Lifeng’s acknowledgment of a “new situation” (新形势) created by U.S. tariff policies shows that, internally, Beijing is already adjusting policies and accelerating defensive measures. In the meantime, emphasis on “struggle” (斗争) and “bottom-line thinking” (底线思维) illustrate that Xi and his fellow leaders are positioning the system to endure prolonged confrontation.

 Notes

[1] The December meeting was the last of four such meetings focused on the economy in 2024.

[2] The key passage here emphasized a need to “step up the implementation of more proactive macroeconomic policies, make good use of more proactive fiscal policies and moderately loose monetary policies” (会议强调，要加紧实施更加积极有为的宏观政策，用好用足更加积极的财政政策和适度宽松的货币政策). It also included calls to “accelerate the issuance and use of local government special bonds and ultra-long-term special treasury bonds … Reduce the reserve requirement ratio and interest rates in a timely manner, maintain ample liquidity, and increase support for the real economy. Create new structural monetary policy tools, establish new policy-based financial instruments, support scientific and technological innovation, expand consumption, and stabilize foreign trade” (加快地方政府专项债券、超长期特别国债等发行使用 … 适时降准降息，保持流动性充裕，加力支持实体经济。创设新的结构性货币政策工具，设立新型政策性金融工具，支持科技创新、扩大消费、稳定外贸等).

[3] These measures included policy support for scientific innovation, security and industrial self-reliance, trade, consumption, real estate and stock market stabilization, and employment and social stabilization.