China’s top leadership has pledged to strengthen energy security and accelerate technological self-reliance, as the country begins to feel the economic impact of the ongoing Iran conflict involving the United States and Israel.

The commitment came during a meeting of the Politburo of the Communist Party of China, which acknowledged rising global uncertainty while emphasising the need for stability through long-term development strategies.

Resilient Growth, Rising Risks

Despite global turbulence, China’s economy grew by 5.0% in the first quarter placing it at the upper end of its full-year target range of 4.5% to 5.0%.

This resilience has been supported by strong oil reserves and a diversified energy mix, allowing the world’s second-largest economy to weather external shocks better than many peers.

However, rising energy and raw material costs are beginning to weigh on manufacturers, threatening to squeeze profit margins and disrupt industrial output.

‘Respond to External Shocks’

According to state news agency Xinhua News Agency, the leadership acknowledged that while the economy had started the year stronger than expected, challenges remain.

Officials stressed the need to “systematically respond to external shocks and challenges” and improve energy security to counter global uncertainty.

The emphasis on “high-quality development” reflects Beijing’s long-term goal of advancing scientific and technological capabilities while moving up the global value chain.

Focus on Technology and Supply Chains

The leadership reiterated its push to build a modern industrial system, expand the use of artificial intelligence, and achieve greater control over critical supply chains.

China’s latest five-year roadmap, unveiled earlier this year, places technological dominance and supply chain resilience at the centre of national security strategy even as some economists call for stronger focus on domestic consumption.

While policies such as boosting consumption, stabilising the property sector, and supporting employment were mentioned, they appeared lower in priority compared to industrial and technological goals.

No Immediate Stimulus Signals

The Politburo maintained its stance of a “proactive” fiscal policy and an “appropriately loose” monetary approach, suggesting no immediate plans for additional economic stimulus.

However, analysts say further support could be introduced if external pressures intensify, particularly if export growth weakens further.

Recent data already points to slowing momentum, with export growth easing sharply and factory gate prices rising, signalling increased production costs without a parallel recovery in demand.

Energy Security in Focus

China’s relatively strong position backed by coal usage, renewable energy expansion, and electric vehicle adoption may help cushion the impact of disruptions such as the closure of key shipping routes like the Strait of Hormuz.

Still, the broader global slowdown and rising costs pose ongoing risks.

Beijing’s latest policy signals suggest a clear priority: strengthening internal resilience through energy security and technological independence, even as external uncertainties continue to mount.

(with inputs from Reuters)