New Delhi: Chinese President Xi Jinping in his televised address on New Year’s Eve said “some enterprises (businesses) had a tough time and some people had difficulty finding jobs and meeting basic needs” — a rare admission of the “headwinds” staring down the Chinese economy.
He assured the country that these issues remained at the “forefront” of his mind and that his administration would “consolidate and strengthen the momentum of economic recovery”.
Xi, however, also said that having weathered the storm, the Chinese economy had become more resilient and dynamic than before.
ThePrint reported earlier how China in 2023 saw a decline in consumer prices for the first time in more than two years and how this, coupled with a decline in exports and a liquidity crisis in the housing sector, impeded growth. Experts had then said that the economic slowdown was a reflection of Xi’s politics.
Record high youth unemployment and a slump in the property sector, along with financial strain at the local government level, further exacerbated China’s economic woes.
In his address, Xi added that the government will “deliver a better life for the people”, through better education and career opportunities for the young, and better healthcare for the country’s senior citizens.
China’s National Bureau of Statistics stopped publishing statistics in June last year after the youth unemployment rate hit a record 21.3 percent.
According to Bloomberg, Beijing is expected to target a growth goal of around 5 percent in the financial year 2024, adding that data released hours before Xi’s speech showed that factory activity in the country shrank in December to its lowest in six months.
To induce confidence in the market, Xi praised China’s “manufacturing prowess” and listed projects the country undertook last year including the development of a homegrown C919 passenger jet, a cruise ship, a manned submersible, electric cars and various space programmes.
Alluding to Taiwan, he said that the island would “surely be reunified” with the mainland. “All Chinese on both sides of the Taiwan Strait should be bound by common sense of purpose and share in the glory of rejuvenation of the Chinese nation,” he said.
Noting that 2024 will mark the 75th anniversary of the founding of the People’s Republic of China (PRC), Xi promised the country that his government would steadfastly advance modernisation and “fully and faithfully apply the new development philosophy on all fronts, speed up building the new development paradigm, promote high-quality development, and both pursue development and safeguard security”.
Besides the 0.3 percent year-on-year decline in the Consumer Price Index (CPI), China’s exports declined by 14.5 percent year-on-year in July 2023.
According to an International Monetary Fund (IMF) working paper published on 4 August last year, “about a quarter of provinces” in China have a “combined local government and LGFV (local government financing vehicles) debt exceeding 100 percent of their GDP”. The paper recommended limiting the ability of the provinces to raise debt.
Moreover, China’s slow economic growth has impacted its flagship programme, the Belt and Road Initiative (BRI). The project aims to connect nations and continents through mega highways, road and rail connectivity projects—promoting trade and investments. As reported by ThePrint earlier, the Goldman Sachs Group, a global financial institution, estimated that the total Chinese government debt stands at 23 trillion USD.
(Edited by Amrtansh Arora)
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