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Xi Jinping rings in 2024 with rare admission that China’s economy is in trouble

Xi Jinping rings in 2024 with rare admission that China’s economy is in trouble

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Hong KongCNN — 

China’s businesses are struggling and job seekers have trouble finding work, President Xi Jinping acknowledged during his Sunday New Year’s Eve speech.

This is the first time Xi has mentioned economic challenges in his annual New Year’s messages since he started giving them in 2013. It comes at a critical juncture for the world’s second largest economy, which is grappling with a structural slowdown marked by weak demand, rising unemployment and battered business confidence.

Acknowledging the “headwinds” facing the country, Xi admitted in the televised speech: “Some enterprises had a tough time. Some people had difficulty finding jobs and meeting basic needs.”

“All these remain at the forefront of my mind,” Xi said in remarks which were also widely circulated by state media. “We will consolidate and strengthen the momentum of economic recovery.”

Hours before Xi spoke, the National Bureau of Statistics (NBS) published its monthly Purchasing Managers’ Index (PMI) survey, which showed that factory activity declined in December to the lowest level in six months.

The official manufacturing PMI dropped to 49 last month, down from 49.4 in November, according to a statement from the NBS.

A PMI reading above 50 indicates expansion, while any reading below represents a contraction. December also marked the third straight month the manufacturing PMI has contracted.

Manufacturing downturn

The country’s massive manufacturing sector had been weak for most of 2023. After a brief pickup in economic activity in the first quarter of last year, the official manufacturing PMI contracted for five months until September. Then it dipped below 50 again.

China’s economy has been plagued by a set of problems this year, including a prolonged property downturn, record high youth unemployment, stubbornly weak prices and mounting financial stress at local governments.