China’s Two Sessions 2025: Growth Target Reiterated, AI in Focus
Why in News?
China’s annual “Two Sessions” meetings concluded on March 11, 2025, with key announcements on economic growth, military spending, and artificial intelligence (AI) investments. The meetings reaffirmed a 5% GDP growth target and introduced strategic measures to boost domestic consumption and technological innovation.
Key Points
1. What are the Two Sessions?
- The Two Sessions include the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC).
- Nearly 3,000 NPC deputies and over 2,100 CPPCC members from across China and Special Administrative Regions (Hong Kong and Macao) attend these meetings.
- The NPC, often seen as a rubber-stamp body, mainly ratifies decisions made by the Chinese Communist Party (CCP).
- The CPPCC serves as an advisory body, with members including business leaders and celebrities.
2. Major Economic Announcements
- 5% GDP Growth Target: Despite economic challenges, China reaffirmed its 5% growth target.
- Debt-to-GDP Ratio Increased to 4%: A rise from last year’s 3% to manage economic pressures.
- Stimulus Measures: To counter sluggish domestic demand and unemployment, stimulus policies were introduced.
- Military Spending Hike: A 7.2% increase in military expenditure, maintaining last year’s growth rate at $245 billion.
3. Focus on Artificial Intelligence and High-Tech Innovation
- State Venture Capital Fund: A 1 trillion yuan ($138 billion) investment over 20 years to support AI and quantum technology.
- AI and STEM Talent Development: Local governments encouraged to build AI clusters, robotics hubs, and biotech centers.
- Support for Private Tech Firms: Acknowledgment of firms like Huawei, BYD, and Xiaomi as key players in tech competition with the U.S.
4. Global and Trade Developments
- Retaliatory Tariffs on U.S. Goods: China imposed new tariffs on coal, liquefied natural gas, agricultural machinery, and large-engine cars following U.S. trade restrictions.
- Shift Toward Domestic Consumption: China aims to reduce reliance on Western economies by strengthening internal demand and self-sufficiency in high-tech supply chains.
Conclusion
The 2025 Two Sessions highlighted China’s economic resilience amidst slowing growth and global trade tensions. While AI and tech investments took center stage, concerns over domestic demand and job creation remain key challenges for China’s leadership.
US Tariffs on Steel and Aluminium: Why Canada and the EU Retaliated, While the UK is Holding Out
Why in News?
The US has imposed a 25% tariff on all steel and aluminium imports, triggering retaliatory actions from Canada and the European Union (EU). However, the UK has refrained from immediate countermeasures, opting for negotiations.
Key Points
1. US Tariffs on Steel and Aluminium
- The US levied a 25% tariff on all steel and aluminium imports effective March 12, 2025.
- Justification: Protection of American manufacturing and national security concerns.
- Affected countries: Canada, Mexico, China, the EU, the UK, Australia, and Brazil.
- Previous tariffs under Section 232 (2018) were extended to more products, including steel door hinges and frying pans.
2. Retaliation by Canada and the EU
Canada’s Response
- Retaliatory tariffs of C$29.8 billion ($20.71 billion) on US goods.
- Tariffs imposed on computers, sports equipment, cast-iron products, and metals.
- Canada Finance Minister Dominic LeBlanc called the US tariffs “unjustified, unfair, and unreasonable.”
European Union’s Response
- $28 billion in retaliatory tariffs on US exports, including:
- Harley-Davidson motorbikes, bourbon whiskey, boats, and agricultural products.
- European Commission President Ursula von der Leyen criticized the tariffs for disrupting supply chains and increasing consumer prices.
- In retaliation, Trump threatened 200% tariffs on EU wine and champagne.
3. China’s Response
- No immediate retaliatory tariffs but stated it would “take all necessary measures to protect its interests.”
4. The UK’s Decision to Hold Back
- No countermeasures announced yet.
- The UK is negotiating a trade deal with the US that could include tariff exemptions.
- Economic reasons:
- The US accounts for 5% of UK steel exports and 6% of its aluminium exports.
- Total value of UK steel and aluminium exports to the US: $1.1 billion (2024).
- Limited leverage in a trade war, as UK goods exports to the US contribute less than 0.5% of US GDP.
- Former UK Chancellor Jeremy Hunt warned that retaliatory tariffs could harm British manufacturers and increase inflation.
Conclusion
The US tariffs on steel and aluminium have sparked retaliatory trade actions from Canada and the EU, escalating tensions. However, the UK has chosen a pragmatic approach, prioritizing negotiations over immediate retaliation. The situation underscores the complexity of global trade relations and the economic risks of protectionist policies.
Trump’s Rollback on Paper Straws: The Environmental Debate on Plastic Straws
Why in News?
- US President Donald Trump has issued an executive order reversing the ban on plastic straws in federal operations, replacing paper straws with plastic alternatives.
- The decision has reignited the debate over the environmental impact of plastic straws and their alternatives.
Key Points
1. The Problem with Plastic Straws
- Plastic straws became a symbol of plastic pollution after a 2015 viral video showed a turtle suffering from a lodged straw.
- Plastic waste production: 380 million tons annually, with 43 million tons being single-use plastic.
- Plastic does not fully decompose and pollutes water, soil, and air, potentially causing health issues like cancer and reduced reproductive capacity.
- Though plastic straws make up less than 1% of ocean plastic waste, they are lightweight, fragment easily, and are difficult to clean up.
2. Environmental Policies and Plastic Bans
- Many governments and businesses, including McDonald’s, Starbucks, the UK, EU, Canada, and India, have restricted plastic straw use.
- Plastic bans are part of broader efforts to curb single-use plastic pollution and its environmental consequences.
3. Are Alternatives to Plastic Straws Effective?
- Paper straws: Often coated with plastic, prone to sogginess, and may contain harmful PFAS chemicals.
- Reusable alternatives (metal, glass, bamboo): Require high energy for production but are sustainable if reused extensively.
- Medical necessity: Plastic straws are essential for people with disabilities and medical needs.
4. Implications of Trump’s Executive Order
- Federal buildings and national parks will revert to offering plastic straws.
- Potential increase in plastic waste, benefiting the plastics industry.
- The decision is seen as part of a broader “Back to Plastic” movement, which could lead to sustained or increased plastic production.
5. The Larger Concern: Plastics and Fossil Fuels
- 99% of plastics are derived from fossil fuels.
- The plastic industry is a major contributor to greenhouse gas emissions, projected to account for 19% of industrial emissions by 2040.
- Critics warn that the rollback could set a precedent for weakening plastic regulations, aligning with fossil fuel interests.
Conclusion
While paper straws may have design flaws, a return to plastic straws poses long-term environmental risks. Sustainable solutions require a balance between usability, recyclability, and environmental impact, avoiding policies that undermine efforts to combat plastic pollution.
