China is sending a clear signal that it will not change its development approach centered on advanced industry and technology, despite pressure from the United States and the European Union, which accuse it of creating overcapacity and distorting competition. President Xi Jinping is scheduled to meet President Donald Trump several more times this year, while the European Union has set an October deadline for China to resolve trade disputes, amid concerns over China's trade surplus exceeding one trillion dollars. The Communist Party of China's Politburo meeting last week reaffirmed the existing economic policy direction, opting for targeted support measures rather than a major consumption stimulus. China's Ministry of Commerce rejected the overcapacity allegations, calling them logically flawed and driven by ulterior motives, while the journal Qiushi defended the country's low domestic consumption rate as a reasonable outcome of the historical development of an investment-driven economic model. Analysts at the Economist Intelligence Unit view this communication as aimed at helping trading partners understand the rationale behind the policies and signaling a red line that China will not accept discriminatory measures against Chinese companies and goods. Premier Li Qiang pushed back against warnings of a China Shock 2.0 with the concept of China Opportunity 2.0, stressing that China's growth is an opportunity for the global economy. However, Eswar Prasad, a professor at Cornell University and former International Monetary Fund official, believes this notion may not persuade countries affected by Chinese exports, given still-weak domestic demand. The United States has imposed tariffs exceeding 100 percent to pressure China but has not fully succeeded, as China leverages its advantage in rare earth production as a bargaining chip. Meanwhile, the European Union, which ran an average trade deficit with China of one billion dollars per day last year, is advancing more protective measures for domestic industries, with German Chancellor Friedrich Merz criticizing China for keeping the yuan weaker than fundamentals suggest. Natixis analysts see China as increasingly confident it can manage trade disputes with both the US and Europe without making significant concessions, noting that Beijing is employing a strategy of buying time through negotiations and compromises on certain issues. OECD research indicates that nearly 60 percent of the increase in market share by Chinese firms can be explained by government subsidies, while the Bank of Italy estimates that domestic factors such as weak consumption and overcapacity account for 75 percent of China's export growth. McKinsey Global Institute notes that China continues to add manufacturing assets each year at three times the combined rate of Europe and the United States, yet earns returns on investment roughly 40 percent lower.