Xi Jinping warns of global competition as China seeks economic revival
President Xi Jinping has stated that attempts to revive China’s economy have become intricate due to global competition for investment, and he is urging measures to prevent significant economic and financial risks, particularly in the property sector and local government debt. In an article titled “State of the Country’s Economy,” Xi noted that greater efforts are necessary to attract and utilize foreign investment.
He tacitly acknowledged the troubling state of the world’s second-largest economy, which shrank to 3% last year, registering its second-lowest growth rate in 50 years. Xi believes that reviving the economy should concentrate on the main issues and begin by enhancing public expectations and increasing development confidence.
Xi tacitly acknowledged the concerning state of China’s economy, which shrank to three percent last year, the second lowest growth rate in 50 years. In a recent article published in an official magazine, Xi stated that efforts to revive the economy in 2023 should focus on major problems, beginning with improving public expectations and boosting confidence in development. China has been facing increased competition in attracting international investment, with investments shifting to countries such as India in recent years due to the government crackdown on big tech industries and the zero-Covid policy.
Last year, China’s GDP fell below the official target of 5.5 percent, with the slow pace being attributed to the zero-Covid policy, periodic lockdowns, and the real estate crisis. This has resulted in rare protests in the country, such as the recent demonstrations by pensioners in Wuhan protesting against cuts to medical services, highlighting the challenges facing Beijing in addressing an aging population and maintaining the financial health of its social security system.
Last year in September, official media reported that the senior population is projected to reach over 300 million by 2025 and 400 million by 2035, according to Xi. In an article, he acknowledged the fierce international competition for foreign investment and recommended that more effort be made to attract and utilize foreign capital. Xi emphasized the need to increase market access, comprehensively enhance the business environment, and provide specialized services to foreign-funded businesses.
He also urged measures to prevent and diffuse significant economic and financial risks, including systemic risks resulting from the property sector, financial risks, and local government debt risks. Local government debt was a constant source of concern for the central government, with China’s local government debt reaching $2.58 trillion in 2019. Xi also noted that there is still critical work to be accomplished in 2023, including the advancement of rural revitalization on all fronts and the planning of a new phase of all-encompassing reforms.