Xi Jinping makes an uncommon admission on the state of China's economy
President Xi Jinping noted in his Sunday New Year’s Eve speech that enterprises in China are having difficulties and that job seekers are having difficulties finding employment.
Since he began delivering them in 2013, this is the first year that Xi has brought up economic difficulties in his yearly letters to the Chinese people. It arrives at a crucial time for the second-biggest economy in the world, which is struggling with a structural slowdown characterized by sluggish demand, growing joblessness, and damaged business confidence.
In the broadcast speech, Xi acknowledged the “headwinds” the nation was facing and said, “Some enterprises had a tough time.” Some folks struggled to make ends meet and obtain employment.
Xi stated, “All these remain at the forefront of my mind,” in comments that were also extensively reported by state media. “We’re going to keep building on the momentum of the economic recovery.”
The National Bureau of Statistics (NBS) released its monthly Purchasing Managers’ Index (PMI) survey just hours before Xi spoke. The results indicated that manufacturing activity fell in December to the lowest level in six months.
According to an NBS release, the official manufacturing PMI fell to 49 last month from 49.4 in November.
Any PMI reading below 50 denotes recession, whereas any reading above 50 suggests expansion. Additionally, December was the third consecutive month that the manufacturing PMI fell.
For the majority of 2023, the nation’s sizable manufacturing sector was struggling. The official manufacturing PMI fell for five months until September of last year, following a small uptick in economic activity in the first quarter of the previous year. It then fell below 50 once more.
This year, China’s economy has faced numerous challenges, such as an extended housing market slump, historically high rates of youth unemployment, persistently low prices, and increasing financial strain on local governments.
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Beijing, which promised to tighten monetary and fiscal policy in 2024 and unveiled a flurry of encouraging measures last year, is rushing to boost employment and resuscitate growth.
However, its increasingly statist economic policies, which highlight the party-state’s grip over social and economic matters at the expense of the private sector, have alarmed business owners. Foreign investors have also been turned off by the government’s crackdown on companies in the name of national security.
Jack Ma’s Ant Group operates the widely used digital payment site Alipay. On Saturday, the People’s Bank of China declared that it had accepted an application to remove controlling shareholders from the company. With this action, Ma has formally given up leadership of the business he co-founded.
In January of last year, Ma, who also co-founded Alibaba Group, said that he was leaving his online ventures, including Ant, and that he would give up management of the company. His businesses were among the first to be targeted by Beijing’s historic crackdown on Big Tech, as the Communist Party believed that these enterprises had grown too dominant.
In a strongly worded statement made just before an important election in Taiwan, Xi also promised that the Chinese mainland would be “reunified” with the island nation, restating Beijing’s long-standing position on the self-governing island democracy.
During the portion of his speech devoted to his goals for China’s modernization and prosperity, Xi declared, “China will surely be reunified, and all Chinese on both sides of the A shared goal should unite the Taiwan Strait and allow them to bask in the grandeur of China’s national revival.”
Two weeks remain before Taiwan’s presidential elections on January 13, and the remarks have a sharper tone than his previous year’s New Year’s speech.
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“The people who live on either side of the Taiwan Strait are related by blood,”
” Xi continued. It is my genuine wish that our fellow citizens on both sides of the Taiwan Strait will collaborate in order to cooperatively promote the long-term development of the Chinese people.
Xi has made regaining control of Taiwan a key component of his larger plan to “rejuvenate” China and elevate it to a position of prominence and power on the world stage. Despite never having had control over the island, China’s Communist Party still regards Taiwan as its territory and has not ruled out using force to annex it.
Taiwan has accused the party of manipulating the election process to benefit incumbent Vice President Lai Ching-te, who is publicly despised by Beijing and is expected to win.
