Xi won’t back down

Chinese President Xi Jinping shows little sign of backing down [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. President Xi Jinping’s vision for powering China’s economy through a major [manufacturing drive is raising tensions]( with some of his nation’s biggest trading partners. The domestic need for growth means he’s unlikely to change course. During her visit to China this week, US Treasury Secretary Janet Yellen implored top Chinese leaders to rethink their industrial strategy, saying the Asian nation was producing more goods than the world could bear. The trained economist advised policymakers to improve “retirement security” and “affordable education” to reduce household savings and encourage domestic spending, in a bid to rebalance the world’s second-largest economy. Essentially, she proposed [an entire rethink]( of their economic strategy. The leadership in Beijing well knows the problems, and even outlined overcapacity as an issue in a major policy document earlier this year. But an entrenched crisis in the property sector that once drove about a quarter of annual expansion means China can’t afford to abruptly shift plans if it wants to hit an ambitious growth target of around 5% this year. President Joe Biden’s campaign to severely restrict China’s access to cutting-edge semiconductors only adds to the impetus. China has made technological self-sufficiency a national priority, as it tries to advance domestic chip design and manufacturing to protect against threats from US policy. With a US presidential election looming in America this November, Beijing is facing increasing pressure from the world’s biggest economy with Republican contender Donald Trump threatening 60% tariffs on China. As Xi tries to challenge the US-led world order, his main partner in that mission is President Vladimir Putin. The Chinese leader’s [continued support for his Russian counterpart]( might be leading to more tension with the US, but it’s another area where he’s unlikely to back down. — [Jenni Marsh]( Putin and Xi in a video link on Dec. 30, 2022. Photographer: Yue Yuewei/Xinhua News Agency/Getty Images Global Must Reads Israel said it’s pulling some troops out of Khan Younis in Gaza amid signs that Palestinians may be able to return to the territory’s second-biggest city, much of which [has been reduced to rubble]( by Israeli airstrikes. Defense Minister Yoav Gallant said the forces were withdrawn partly to prepare for an offensive on Rafah near the southern border with Egypt. Destroyed buildings in Khan Younis on March 8. Photographer: Ahmad Salem/Bloomberg The foreign ministers of the UK and France called on allies to “do even more to ensure we defeat Russia” in a joint article in the Telegraph newspaper. The UK’s David Cameron is [travelling to Washington this week]( to urge US House Speaker Mike Johnson to find a way for Congress to approve a $60 billion military aid package for Ukraine. Peter Pellegrini’s election as Slovakia’s president is a boost to Moscow-friendly Prime Minister Robert Fico, who has been a staunch opponent of military aid to Ukraine. The victory will strengthen forces within the European Union [that oppose sending more weapons to Kyiv]( at a time when it appears increasingly outgunned by Russia. Ecuadorian President Daniel Noboa took a big gamble when he violated international rules by [sending police to storm]( the Mexican embassy to arrest Jorge Glas, a former vice president convicted of corruption. While Mexico cut diplomatic ties, and the US and every major country in Latin America condemned the move, many at home welcomed it. Brazilian Supreme Court Justice Alexandre de Moraes opened an inquiry into [whether Elon Musk obstructed justice](. Moraes said in a court document that the billionaire’s social media platform X is committing abuse of economic power in order to “illegally influence public opinion.” In posts over the weekend, Musk accused the judge of betraying the constitution and called for his impeachment. Polish Prime Minister Donald Tusk’s three-way alliance won a majority in local elections yesterday but [failed to land a knock-out blow]( against the former ruling nationalists. Moscow’s ambassador to France, Alexey Meshkov, said President Emmanuel Macron’s [recent hawkish comments]( on Russia pose “a serious strategic problem.” South Africa’s state power utility, stung by reports about [the health impact of emissions]( from burning coal, said it’s spending billions of dollars to reduce them. Washington Dispatch Senators return from the Easter recess today and must prepare for a proceeding most would rather avoid: accepting delivery from the House of articles of impeachment against Homeland Security Secretary Alejandro Mayorkas. Majority Leader Chuck Schumer, a Democrat, said in a letter to colleagues last week that “all senators will be sworn in as jurors in the trial the day after the articles are presented” on Wednesday. It remains unclear whether a trial will actually take place. Schumer could move to dismiss the charges or to simply put them off. In February, Mayorkas became the first cabinet member to be impeached in nearly 150 years. The vote succeeded by the narrowest of margins, but it fulfilled a pledge by House Speaker Johnson. Republicans pressed the impeachment charges against Mayorkas as part of [their attacks on Biden administration border policies](, with migration becoming a major campaign issue. No matter how swiftly Senate Democrats dispose of the impeachment, it promises to loom large in what Schumer called in his letter the “busy agenda facing us.” That also includes confirmation of nominees for various administration posts, a deadline to renew part of the Foreign Intelligence Surveillance Act and authorizing funds to rebuild the Francis Scott Key Bridge in Baltimore. One person to watch today: Biden will speak in Madison, Wisconsin, and take part in a campaign event in Chicago. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day With shoddy roads, patchy education, red tape and a lack of skilled workers [it would take a lifetime]( for India’s $3.5 trillion economy to overtake the $17.8 trillion behemoth that is China. But there’s one important measure where India could surpass its northern neighbor far more quickly: as the engine of global growth. And Finally A tiny island in the South China Sea symbolizes the disparity in the Philippines’ efforts to [assert its rights in disputed waters]( when compared to China, which claims much of the area. Manila is rushing to develop the 82-acre Thitu Island, with the government planning to pour in billions of pesos to upgrade it. But about 17 miles to the southwest, China has built a fully functioning military base on Subi Reef that is estimated to be 12 times the size of Thitu. Thitu Island’s runway in March 2023. Photographer: Jam Sta Rosa/AFP/Getty Images Thanks to the 23 people who answered the Friday quiz and congratulations to Ben Hardaker, who was the first to identify South Africa as the country whose former speaker of parliament surrendered to the authorities after facing graft charges. 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