China’s economy has been struggling to stage a convincing comeback. Now, even Chinese leader Xi Jinping has acknowledged the many challenges the country’s economy faced 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.”
It’s the first time Xi spoke about economic difficulties since he started giving New Year’s messages in 2013, per 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 3.0% in 2022 in one of its worst showings in half a century, as the country contended with intense COVID-era restrictions, and a property crisis that dragged into 2023. Beijing’s been trying to shore up the Chinese economy by introducing measured 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.
Nomura economists wrote in a Tuesday note that China’s underlying growth momentum is likely to remain “lackluster.”
“Despite a spate of stimulus measures announced recently, we believe it is still too early to call the bottom, and there might be another economic dip in spring 2024 due to a faltering property sector, the fading of pent-up demand, sagging external demand, excess capacity in some ‘green’ sectors and persistent geopolitical headwinds,” wrote the Nomura economists.
