President Xi Jinping admits economic struggles in New Year’s Eve speech.
First time Xi mentions economic challenges in annual New Year messages since 2013.
China’s economy faces structural slowdown, weak demand, rising unemployment.
Xi Jinping’s Rare Admission: China’s Economy Faces Challenges
In a notable shift from his typical New Year’s messages, President Xi Jinping openly acknowledged China’s economic challenges in his Sunday address. This is the first time since 2013 that Xi has mentioned economic struggles, emphasizing a critical juncture for the world’s second-largest economy. The structural slowdown, weak demand, and rising unemployment led Xi to address the “headwinds” and commit to consolidating and strengthening economic recovery.
]National Bureau of Statistics Reports Decline in Factory Activity
Shortly before Xi’s speech, the National Bureau of Statistics (NBS) published its Purchasing Managers’ Index (PMI) survey, revealing a decline in factory activity. The official manufacturing PMI dropped to 49 in December, the lowest level in six months, indicating a contraction. However, concerns arise from the government’s statist approach, diminishing private sector confidence, and the impact of regulatory crackdowns on businesses. This is evident in the recent control shift at Alipay.
Economic Struggles China’s and Government Measures economy
China’s economic woes stem from a prolonged property downturn, record-high youth unemployment, weak prices, and financial stress at local governments. Beijing has responded with supportive measures and vows to intensify fiscal and monetary policies in 2024. However, concerns arise from the government’s statist approach, diminishing private sector confidence, and the impact of regulatory crackdowns on businesses. This is evident in the recent control shift at Alipay.