China’s Economic Conundrum Under Xi Jinping – Analysis
==========
China's economic predicament is rooted in a struggling real estate sector and a strategy predicated on a shift towards high-tech industries. President Xi Jinping's prioritisation of national security and scepticism of market forces is exacerbating the problem and leading to tensions between political will and economic imperatives. China's troubled real estate sector once accounted for an impressive % of national GDP. Its peak in 2018 gave way to a sharp downturn — which, further aggravated by the COVID-19 pandemic, today functions at approximately % half of its former capacity. This decline has left a big mark on China's economic fabric, with property sales plummeting by 20.5 per cent in the first two months of 2024. The government's ' ' policy — designed to mitigate substantial risks among the many property developers with mounting debt — was a lukewarm response that led to reduced residential investment. The policy indicates Xi's pivot towards more technologically advanced industries, , big data, bioengineering, semiconductors and quantum computing. Xi's deep-seated scepticism of market forces, shaped by the experience of corruption and ideological deviations during former president Hu Jintao's administration, continues to influence economic policy. His cautious approach has placed increased scrutiny and limitations on major tech firms, reflecting a strategy of that favours firm state control over market-driven growth. The government's preference for bolstering state-owned enterprises at the expense of the private sector — which has been a cradle of innovation and economic vitality — is a decisive political stance. But bureaucratic state-owned enterprises cannot yield the same successes as a thriving entrepreneurial sector when it comes to innovating in cutting-edge technology. Xi's approach dampens entrepreneurial spirit and curbs the private sector's capacity to innovate and compete globally. China's economic rebound could take several years and become a medium-term slowdown once robust manufacturing sector — though showing signs of revival — cannot fully offset the substantial downturn in real estate. Consumer confidence has also declined, with retail sales growth slowing to 2.3 per cent year-on-year in April 2024. The government faces a dilemma in reigniting growth without reverting to outdated methods. Xi's ideological framework, which champions a Marxist-socialist model over Western capitalist paradigms, presents a landscape where political decisions profoundly influence economic outcomes. China must regain momentum before it misses its opportunity for economic rejuvenation.
#China #XiJinping #Economy #RealEstate #HightechIndustries
https://www.eurasiareview.com/30062024-chinas-economic-conundrum-under-xi-jinping-analysis/
Eurasia Review /
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2024-06-30 01:27:01
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"content": "China’s Economic Conundrum Under Xi Jinping – Analysis\n==========\n\nChina's economic predicament is rooted in a struggling real estate sector and a strategy predicated on a shift towards high-tech industries. President Xi Jinping's prioritisation of national security and scepticism of market forces is exacerbating the problem and leading to tensions between political will and economic imperatives. China's troubled real estate sector once accounted for an impressive % of national GDP. Its peak in 2018 gave way to a sharp downturn — which, further aggravated by the COVID-19 pandemic, today functions at approximately % half of its former capacity. This decline has left a big mark on China's economic fabric, with property sales plummeting by 20.5 per cent in the first two months of 2024. The government's ' ' policy — designed to mitigate substantial risks among the many property developers with mounting debt — was a lukewarm response that led to reduced residential investment. The policy indicates Xi's pivot towards more technologically advanced industries, , big data, bioengineering, semiconductors and quantum computing. Xi's deep-seated scepticism of market forces, shaped by the experience of corruption and ideological deviations during former president Hu Jintao's administration, continues to influence economic policy. His cautious approach has placed increased scrutiny and limitations on major tech firms, reflecting a strategy of that favours firm state control over market-driven growth. The government's preference for bolstering state-owned enterprises at the expense of the private sector — which has been a cradle of innovation and economic vitality — is a decisive political stance. But bureaucratic state-owned enterprises cannot yield the same successes as a thriving entrepreneurial sector when it comes to innovating in cutting-edge technology. Xi's approach dampens entrepreneurial spirit and curbs the private sector's capacity to innovate and compete globally. China's economic rebound could take several years and become a medium-term slowdown once robust manufacturing sector — though showing signs of revival — cannot fully offset the substantial downturn in real estate. Consumer confidence has also declined, with retail sales growth slowing to 2.3 per cent year-on-year in April 2024. The government faces a dilemma in reigniting growth without reverting to outdated methods. Xi's ideological framework, which champions a Marxist-socialist model over Western capitalist paradigms, presents a landscape where political decisions profoundly influence economic outcomes. China must regain momentum before it misses its opportunity for economic rejuvenation.\n\n#China #XiJinping #Economy #RealEstate #HightechIndustries\n\nhttps://www.eurasiareview.com/30062024-chinas-economic-conundrum-under-xi-jinping-analysis/",
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