The Economist: China’s President Should Be Worried About Many Things
The Economist said that the faltering Chinese economy and rising social tensions, as US President-elect Donald Trump prepares to enter the White House, will make the coming year full of difficulties that Chinese President Xi Jinping fears, and the country’s ambiguous politics may raise surprises.
The Economist recalled what Xi Jinping said to his fellow leaders shortly after taking power in 2012, “As our cause advances, new situations and problems emerge, and we encounter more risks, challenges and unexpected events”.
The British magazine pointed out that the possibility of turmoil resulting from Trump’s presidency in the relationship between the two countries is a major and immediate source of concern, because the decisions that Trump and his hardline team will take in dealing with China will affect matters that Xi considers crucially linked to the Communist Party’s grip on power.
Trump has threatened to impose a 60% tariff on imports from China, plus an immediate 10% increase, if China fails to curb exports to the United States of fentanyl, a powerful synthetic opioid that kills tens of thousands of Americans each year.
That could cut China’s economic growth by more than 2 percentage points, some analysts say, and Xi has no easy answers.
The Chinese president may respond by ramping up the stimulus measures he began unveiling in September, but consumer and investor caution suggests they will be difficult to achieve, and he may allow the yuan to depreciate against the dollar in order to make Chinese exports cheaper and maintain competitiveness despite the additional tariffs.
But that would further erode investor confidence, prompting capital to flee, and could exacerbate tensions with major trading partners who are nervous about China flooding their markets with cheap goods.
The British magazine expects that the term social work will be prominent in the party’s discourse in 2025.
This doesn’t mean promoting social justice or providing services to people in need, but rather strengthening the party’s control at the grassroots level.
Much attention will be focused on the 2025 economic growth target, when it is announced at China’s annual parliament session that begins on March 5.
Recent calls by officials for extraordinary efforts to support the economy suggest they are preparing for a higher target, and to bolster confidence, the government may reiterate the 2024 target of around 5% as the economic growth target.
With all the turmoil at home, President Xi Jinping may not be willing to take big risks abroad, and may prefer to stand aside while Trump tries to secure peace in Ukraine, a war that complicates China’s relations with Europe but helps China by draining Western resources, according to the Economist.
When Trump takes office, how he handles Ukraine could create tension between European countries and the United States, and the kind of hostility that China prefers.
Xi will continue to intimidate Taiwan and rival claimants to territory in the South China Sea, while avoiding conflict that might draw the United States into the region.
As the Chinese president sees it, risks at home and abroad can intertwine in dangerous ways.
“If we don’t take preventive measures or handle them properly, they will accumulate, escalate and evolve, from small crises to major crises, from regional crises to global crises, ultimately threatening the party’s rule and state security,” he told senior officials in 2016.
