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| Li Xueren Photo: Getty Images |
President Xi Jinping, in his New Year’s Eve address, acknowledged the struggles faced by Chinese businesses and the challenges encountered by job seekers. This marks a departure from his previous annual messages since 2013, highlighting the critical phase for the world's second-largest economy. This phase is characterized by sluggish demand, escalating unemployment rates, and a significant decline in business confidence.
Xi, addressing the prevailing "headwinds" confronting the nation, openly recognized the hardships experienced by enterprises and individuals in securing employment and meeting their basic necessities. These statements, widely disseminated by state media, reflected Xi's concern as he pledged to reinforce and fortify the ongoing economic recovery.
Shortly before Xi's speech, the National Bureau of Statistics released its Purchasing Managers' Index (PMI) report for December, unveiling a decline in factory activity to its lowest point in six months. The official manufacturing PMI plunged to 49 last month from November's 49.4, indicating a contraction in manufacturing activities for the third consecutive month.
Throughout 2023, China's expansive manufacturing sector remained feeble, experiencing a downturn. Despite a brief resurgence in economic activity during the initial quarter of the year, the official manufacturing PMI exhibited contraction for five months until September and again fell below the 50 mark.
The Chinese economy grappled with various issues throughout the year, including an extended slump in the property market, surging youth unemployment figures, persistently low prices, and escalating financial strains at local government levels.
Beijing is racing to stimulate growth and boost employment, implementing an array of supportive measures last year and committing to intensify fiscal and monetary policies in 2024.
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However, its increasingly interventionist economic strategy, emphasizing the party-state's authority over economic and social affairs at the expense of the private sector, has unsettled entrepreneurs. The government's stringent actions against businesses in the guise of national security have also deterred international investors.
Recently, the People's Bank of China approved the removal of controlling shareholders at Alipay, the widely-used digital payment platform operated by Jack Ma's Ant Group. This step signifies Ma's official relinquishment of control over the company he co-founded.
Ma, who also co-established Alibaba Group, announced last January his intention to step back from Ant, as part of his retreat from online businesses. His enterprises were among the initial targets of Beijing's unprecedented crackdown on Big Tech, perceived as having amassed excessive power according to the Communist Party's viewpoint.
Regarding Taiwan, Xi reiterated Beijing's enduring stance on the island's self-governing democracy, asserting the Chinese mainland's commitment to reunification. His resolute comments, preceding a crucial election in Taiwan, conveyed a stronger tone compared to his New Year address the previous year.
Xi's pursuit of Taiwan's control aligns with his overarching objective to "revitalize" China on the global stage. Despite Taiwan being viewed by China's Communist Party as its rightful territory, Xi hasn't ruled out employing force to reclaim the island, despite never having governed it.
Taipei has accused the party of conducting influence operations ahead of the upcoming election, where Vice President Lai Ching-te, a candidate openly opposed by Beijing, has emerged as a front-runner.
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