The Chinese economy is struggling to achieve a convincing recovery. Today, even Chinese leader Xi Jinping warns of the many demanding situations the country’s economy will face in 2023.
“Some enterprises had a tough time. Some people had difficulty finding jobs and meeting basic needs,” said Xi in a Sunday speech to usher in 2024, per an official transcript. He also described the challenges as “headwinds.”
This is the first time Xi has spoken about economic difficulties since he began broadcasting New Year messages in 2013, according to CNN.
Despite his rare, frank acknowledgment of China’s economic woes, Xi trumpeted the country’s wins for most of his speech, lauding advancements in its sustainable industries and the return of domestic tourism.
China’s economy grew by 3. 0% in 2022, one of its worst effects in nearly a century, as the country grappled with intense COVID-era restrictions and a property crisis that lasted until 2023. Beijing tried to improve the Chinese economy by introducing measured measures. stimulus measures, but analysts say they are not enough.
Xi’s speech came hours after an official survey of China’s manufacturers showed that factory activity contracted for the third straight month, with the country’s Purchasing Managers’ Index hitting 49 in December — a six-month low.
Economists at Nomura wrote in a note on Tuesday that China’s underlying expansion momentum would likely remain “lackluster. “
“Despite a series of recently announced stimulus measures, it is still too early to determine the negative point and a further economic slowdown is possible in spring 2024 due to a faltering real estate sector, pent-up decline and sinking . external demand, excess capacity in some “green” sectors and persistent geopolitical headwinds,” Nomura economists wrote.
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