The slowdown is posing perhaps the most sustained challenge to President Xi Jinping’s agenda in over a decade in power. He now faces a tangle of difficult choices.
in Xi Jinping’s strategy for securing China’s rise, the Communist Party keeps a firm grip on the economy, steering it out of an old era dependent on real estate and smokestack industries to a new one driven by innovation and consumer spending.
But he may have to relinquish some of that control, as that strategy comes under pressure.
Consumers are gloomy. Private investment is sluggish. A big property firm is near collapse. Local governments face crippling debt. Youth unemployment has continued to rise. The economic setbacks are eroding Mr. Xi’s image of imperious command, and emerging as perhaps the most sustained and thorny challenge to his agenda in over a decade in power.“It’s a moment of great uncertainty, and arguably the moment of least confidence, surrounding the Xi administration,” Neil Thomas, a fellow at the Asia Society’s Center for China Analysis, said in an interview. “The worse things get for China’s economy, the more likely it is that Xi Jinping has to make some course correction.”
Earlier this year, Mr. Xi started his third term as China’s president, appearing indomitable. He had cast aside three years of bruising pandemic lockdowns and was confident that business would recover. He was committed to taming the debt-laden real estate sector even as home sales fell. And he had a new Communist Party leadership team of loyalists poised to push through his growth plans.