During his New Year speech, Xi Jinping briefly stepped away from his usual script to mention the challenges China’s economy is facing, while still repeating the government’s commitment to its growth goals. China’s head of state used his address to state that the economy had entered a difficult period.
He pointed to both external uncertainties and internal changes in economic drivers as obstacles but insisted that through persistence, those problems could be addressed. “The current economic situation is experiencing new developments,” Mr. Xi said in the speech aired on CCTV, the country’s main television station.
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“We are facing pressure due to changing global conditions and adjustments in our own economic model, but determination and hard work can solve this.” He followed that with a message of encouragement. “Let everyone remain hopeful and confident,” he added.
Moving Focus in Yearly Remarks
It is unusual for Mr. Xi to bring up economic struggles during his yearly speeches, which are typically used to emphasize what the government has achieved. But in recent times, the administration has shown more willingness to speak about steps being taken to strengthen the country’s financial position.
Recently, officials have committed to borrowing more money, increasing government spending, and lowering interest rates in a bid to revive weak household spending. China’s recovery after the Covid-19 pandemic has been slow, held back by a troubled property sector and a continued decrease in consumer prices.
At the same time, the country may soon have to deal with a challenging foreign trade situation. With Donald J. Trump set to take office again, his previously stated plans to raise tariffs on imported goods could have a major impact on Chinese exports, which may face tougher barriers in the United States.
Earlier that Tuesday, during a different public appearance, Mr. Xi reported that China’s economy grew by “about 5 percent” in 2024, meeting the government’s original goal. He described the economy as being “stable and steady” in terms of performance.
Skepticism Over Official Numbers
Though Mr. Xi presented the 5 percent growth rate as a solid outcome, some outside experts have questioned whether that figure truly reflects reality.
The Rhodium Group, a consulting organization, published a report on Tuesday suggesting that the official data does not align with the heavy measures the government introduced throughout the year. According to them, such aggressive interventions would not have been necessary if the economy had really performed as claimed.
Rhodium estimated China’s actual economic growth in 2024 to be somewhere between 2.4 and 2.8 percent. They also projected that for 2025, growth could land between 3 and 4.5 percent, with the upper end only possible if everything worked out in China’s favor.
Analysts from various backgrounds have continued to argue that China’s economy depends too much on selling goods overseas and that its policymakers need to focus more on encouraging spending within the country.
