Xi Jinping, China's President since 2013, recently addressed economic concerns during a symposium in Lanzhou, the capital of Gansu Province. The leader of the world's second-largest economy by nominal GDP emphasized the importance of meeting annual economic and social development targets, particularly as the third quarter of 2024 draws to a close.
Xi stressed the need to prioritize employment, a crucial issue given China's aging population and shrinking workforce. He called for expanded job opportunities in developing industries, reflecting the ongoing shift in China's economic structure since reforms began under Deng Xiaoping in 1978.
The President also pledged to eliminate local protectionism, reform state-owned enterprises, and bolster the private sector. This commitment aligns with China's economic evolution since joining the World Trade Organization in 2001, balancing state control with market forces.
Despite August 2024 showing improved export performance, China continues to grapple with deflationary pressures. This challenge comes years after the Chinese stock market crash of 2015-2016, which erased trillions in market value. Economists are closely watching the upcoming release of August industrial output, retail sales, and unemployment data, scheduled for September 16, 2024.
Global financial institutions have adjusted their 2024 growth forecasts for China to below the official target of approximately 5%. This revision reflects ongoing economic hurdles, including a prolonged housing downturn, persistent unemployment, debt concerns, and escalating trade tensions. China's debt-to-GDP ratio has significantly increased in recent years, adding to the complexity of its economic landscape.
The current situation has intensified pressure on Chinese authorities to implement additional policy measures. A central bank official recently hinted at the possibility of reducing the reserve requirement for banks, indicating potential monetary easing.
As the world's largest exporter of goods since 2009, China's economic health has global implications. The country's leadership, including Xi Jinping, faces the challenge of maintaining growth while addressing structural issues in an economy that has slowed since its peak growth rates in the early 2000s.
"We must do a good job in economic work towards the end of the third quarter and the fourth quarter."
This statement underscores the urgency felt by Chinese leadership to address current economic challenges and meet development goals. As China navigates these complex economic waters, the world watches closely, recognizing the far-reaching impact of the nation's economic performance.