People eat dinner at a restaurant as Chinese President Xi Jinping is shown on a screen delivering a New Year’s speech in Beijing on December 31, 2023. Pedro Pardo/AFP via Getty Images
Chinese President Xi Jinping, in a rare acknowledgment of the headwinds facing his country, acknowledged that 2023 was a difficult year for some businesses and people, and vowed to strengthen economic momentum and create jobs.
While touting China’s achievements in his New Year’s address, the Prime Minister said that last year “some businesses were in a difficult situation” and “some people had difficulty finding work and meeting their basic needs.” ” he pointed out.
“We will strengthen and strengthen the momentum of economic recovery and strive to achieve stable and long-term economic development,” Xi said in a televised address on Sunday.
The government’s goal is to “provide a better life for its people. Children should be well cared for and receive a good education, and young people should be given the opportunity to pursue their careers and be successful.” “The elderly should be able to enjoy a decent life,” he said, “with medical services and elderly care.”
Improving people’s welfare has been an important part of the social contacts that the Communist Party has relied on for its governance. The new year marks a pivotal time for China, as policymakers seek to boost growth, stabilize the real estate crisis and prevent the world’s second-largest economy from sleepwalking into deflation.
The Chinese government is expected to aim for a growth target of around 5% again in 2024, but the higher base will make it harder to achieve.
Investor confidence plummeted as concerns about the Chinese government’s unclear policy decisions persisted and rising overseas interest rates spurred capital outflows. A recent crackdown on the gaming industry triggered an $80 billion collapse, while annual purchases of Chinese stocks by foreign investors hit an all-time low.
Signs of economic weakness have intensified in recent days, with factory activity contracting to a six-month low in December, putting pressure on policymakers to act quickly to kick-start the economy. Probability is high.
Mr. Xi on Sunday touted China’s “manufacturing capabilities,” listing projects such as the domestic C919 jetliner, Chinese-made cruise ships, a space program, manned submarines and electric vehicles.
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China’s most powerful leader since Mao Zedong continues to break Communist Party norms, taking the fewest trips abroad in the non-pandemic year since taking power, with just four trips. He postponed an important economic conference held every five years to plan the country’s reforms.
As the turmoil spread to the top echelons of the military, Mr. Xi suddenly dismissed the defense minister and the top leaders of the Rocket Force. The Chinese government also dismissed its foreign minister without explanation, further increasing instability.
The new year also brings new geopolitical risks with elections in the United States and Taiwan.
In his speech, Xi reiterated that China “will definitely reunify,” alluding to Taiwan, which split from the mainland in 1949 at the end of a civil war, but which China still claims to be its own.
Taiwan’s intense election on January 13 will decide how the country of more than 23 million people responds to Beijing’s moves. The incumbent Democratic Progressive Party aims to strengthen ties between Taipei and Washington, but the opposition Kuomintang, which is in a close second place in recent opinion polls, has become Beijing’s preferred negotiating partner in Taipei.
“All Chinese people on both sides of the Taiwan Strait should be bound by a common sense of purpose and share the glory of the rejuvenation of the Chinese nation,” Xi said.