China’s top leader, Xi Jinping, veered momentarily from his usual talking points in a New Year’s address to acknowledge the challenges of the country’s faltering economy and vow that the government was working to usher in the next phase of growth.
“The current economic operation is facing some new situations, there are challenges from the uncertainty of the external environment and pressure from the transformation of new and old drivers, but these can be overcome through hard work,” Mr. Xi said in a speech televised on state broadcaster CCTV.
“Everyone should be full of confidence,” he said.
Even the indirect reference to the economy’s troubles is unusual in an address from Mr. Xi, who uses these annual speeches to trumpet the government’s accomplishments over the previous year. In recent weeks, China has become more vocal about the need to take measures to bolster its economy.
The country’s leaders in recent months have pledged to increase public borrowing, spend more and cut interest rates to try to lift consumer spending, a stubbornly weak spot in China’s economy. China’s economy has struggled to rebound after the Covid-19 pandemic, dragged down by widespread problems in its real estate sector and an unrelenting fall in prices.
China is also facing the prospect of squaring off with President-elect Donald J. Trump, who has threatened to impose tariffs on foreign goods, which could mean even greater levies on U.S. imports from China.
At a separate New Year’s event earlier on Tuesday, Mr. Xi said the economy grew “about 5 percent” in 2024, meeting the government’s stated target from the start of the year. He said the overall operation of the economy is “stable and steady.”
Mr. Xi’s confirmation of China’s 5 percent target for gross domestic product, a measure of economic activity, raised questions about the validity of those figures.
“China’s 2024 claim that G.D.P. growth was on track to meet high targets was impossible to reconcile with increasingly frantic efforts to prop up a flagging economy all year long,” the Rhodium Group, a consulting firm, wrote in a report on Tuesday.
The increasingly bold measures from the government, such as loosening its monetary policy for the first time in 14 years, does not square, Rhodium argued, with the moderate growth that the 5 percent target would indicate.
Rhodium estimates that China’s economy grew between 2.4 percent and 2.8 percent in 2024. It estimated that China can reach between 3 percent to 4.5 percent growth in 2025, and would reach the high end of that range only “if everything falls in Beijing’s favor.” Analysts have said that the Chinese economy is too reliant on exports and policymakers must do more to bolster domestic demand.
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