China Would Take a Happy-ish New Year

In a New Year’s Eve speech on Sunday, Chinese President Xi Jinping told Chinese citizens to be prepared for even further financial struggles.

Photo of Shanghai skyline.
Photo by Denys Nevozhai via Unsplash

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The storm that China has been weathering since 2020 doesn’t look like it’s letting up anytime in the next year.

In a New Year’s Eve speech on Sunday, Chinese President Xi Jinping told Chinese citizens to be prepared for even further financial struggles. “​​On the path ahead, winds and rains are the norm,” he said. His statements came shortly after Beijing published data that forecasts more economic weakness in 2024. 

Brace Yourselves

Here at The Daily Upside, we’ve gone over many of the economic bubbles that seemingly burst in China during 2023: high youth unemployment, a tanking property sector, debt-ridden local governments, and diminished Western investment. In addition to those pitfalls, China also saw its manufacturing and services activity dip in the face of slow demand and consumer belt-tightening, according to surveys cited by The Wall Street Journal. 

Another blow that’s been building over the past few years has been the hit to its publicly traded internet companies, which have lost more than $1.2 trillion in market value since Beijing began sweeping regulatory crackdowns, the WSJ reportedSome of the nation’s biggest names on the net — Alibaba, Baidu, and Tencent — have seen their stock prices plummet by more than half from peaks in 2020 and 2021.

The International Monetary Fund expects China’s economic growth to slow to 4.6% in 2024, from a projected 5.4% in 2023. In many cases, China’s problems built slowly over time, and now, Xi and the rest of the Chinese Communist Party are prepared for a slow trek to recovery:

  • Despite the poor outlook, Xi insisted the country was heading in the right direction, touting progress in electric vehicle, battery, and solar panel production. He also referenced the C919 — the first Chinese-made passenger jet that made its commercial maiden flight in May — which could allow China to have a place in the Western-dominated aviation market. 
  • China’s citizens and businesses could benefit from stimulus packages, but Beijing is taking a cautious approach. Xi has mentioned his disdain for Western-style handouts and said stimulus will be focused on infrastructure and manufacturing centers.

Sabers Still Rattling: Xi also addressed Taiwan’s upcoming presidential election. China claims sovereignty over Taiwan, but the island nation and many countries around the world disagree. Taiwan’s presidential election is later this month, and the frontrunner is Democratic Progressive Lai Ching-te, whom the CCP sees as a separatist. “The reunification of the motherland is a historical inevitability,” Xi said. China has been building up its military presence around Taiwan, and Beijing hasn’t ruled out taking Taipei by force.