China’s economy, which is the world’s second biggest behind the US, recorded growth of 4.8% in the first nine months of the year, trailing Beijing’s official target of about 5%.
Weak sentiment and deflationary pressures follow a series of blows, from the pandemic and a years-long property market slump to Xi’s reassertion of Communist party control over large swathes of China’s business landscape.
Xi also repeated a thinly veiled warning over international support for Taiwan. China claims sovereignty over Taiwan and has not ruled out using force if Taipei refuses unification indefinitely.
“Compatriots on both sides of the Strait are one family. No one can sever our blood ties and kinship, and no one can stop the historical trend of national reunification,” Xi said.
Xi has increasingly steered state support for high-tech manufacturing and industry, lifting investment in electric vehicles, batteries, semiconductors and artificial intelligence, while pursuing China-made production of critical technologies.
On Tuesday he highlighted China’s progress in technological self-reliance and breakthroughs in areas including computer chips, AI and space exploration.
A series of policy-easing measures announced by Beijing since September, including some property and stock market support, has been viewed as a sign that the Xi administration is shifting focus to stoking domestic demand.
Reflecting those changes, the World Bank last week revised its forecast for China’s GDP growth next year upwards by 0.4 percentage points to 4.5%.
However, China has this year been rocked by a series of mass killings and stabbings that some experts have blamed on rising social strains. Fan Weiqiu, a 62-year-old man, was last week sentenced to death after being found guilty of driving his car into a crowd in Zhuhai, southern China, in November, leaving at least 35 people dead, the country’s worst mass killing in a decade.
Ahead of a series of national holidays Beijing has started to urge local governments to expand the delivery of seasonal cash handouts to people facing economic hardship, including unemployed youth.
Kelvin Lam, an economist at Pantheon Macroeconomics, said while the handouts would not have a significant impact on the broader economy they might shore up social stability and consumption in poorer rural areas.
China’s economic outlook has been further weakened by strained relations with the US.
Under President Joe Biden the US has restricted China’s access to computer chips, clamped down on Chinese investment into the US and ramped up sanctions on Chinese companies for trading with Russia in the wake of the full-scale invasion of Ukraine.
Earlier on Tuesday Xi told Russian leader Vladimir Putin that “strategic co-ordination” between China and Russia continued to reach higher levels under their leadership, according to a New Year message reported by Xinhua, the state news agency.
Additional reporting by Wenjie Ding in Beijing, Cheng Leng in Hong Kong and Kathrin Hille in Taipei
Written by: Edward White in Shanghai
© Financial Times
