April 14, 2024 3:06 pm
Xi Jinping’s retreat on the global stage due to China’s slowing economy

Despite the challenges faced by China, there are still bright spots in its present and future. Chinese electric vehicles are projected to capture a quarter of European sales this year, and factory activity is rebounding. Analysts at Citi have upgraded their prediction for the Chinese economy to 5% growth this year. However, these positive developments may not be enough to prevent a concerning slowdown in China, as concerns about the Communist Party’s mandate to rule continue to mount.

During recent interactions with Xi Jinping and President Biden, Xi Jinping expressed concerns about America’s sanctions that could hinder China’s progress in key sectors like semiconductors, artificial intelligence, and renewables. He also raised issues like America’s support for Taiwan and the potential divestment of TikTok from its parent company. In response, there appears to be a change in China’s tone, with a reduction in aggressive rhetoric from the wolf warriors and renewed dialogue between the Chinese and American militaries. This shift towards cautiousness could represent a strategic move by China to ease external pressures on its economy.

The Communist Party stopped publishing figures on unemployment among young people last summer, but it was estimated that over a fifth were unemployed at that time. Consumer and business confidence in China are currently at an all-time low, with no fully realized post-Covid recovery yet expected. These challenges have prompted some concern about whether China may never be able to escape the middle income trap, which raises questions about the Communist Party’s mandate to rule. However, despite these difficulties, there is still potential for growth in areas such as renewable energy and electric vehicles.

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