Will Xi take a new economic direction? As Chinese leader Xi Jinping kicks off his third term as general secretary of the Chinese Communist Party (CCP), the economy that greets him today is vastly different than the one that saw him ascend to his role a decade ago. The decisions he makes during this new term risk reducing the Chinese economy by as much as five trillion dollars over the next five years, with potentially devastating effects for global growth.To get more china economy latest news, you can visit shine news official website. When Xi became China’s leader in 2012, he inherited a nation of newfound wealth growing at a rapid pace. Expanding at an average pace of around 7 percent a year, the Chinese economy nearly doubled in size over the course of Xi’s first two terms. Now, the situation is markedly different. For the first time since 1989, China will miss its annual gross domestic product (GDP) growth target. Officially, Beijing points to the sweeping COVID-19 restrictions it has implemented across the country to explain the slowdown. However, deceleration in growth prior to the start of the pandemic and economic crises including a meltdown in the property sector, distressed local government finances, and rising youth unemployment suggest that the slowdown may have deeper roots. As questions mount around China’s economic performance, new research from the Atlantic Council GeoEconomics Center and Rhodium Group’s China Pathfinder explores whether the growth slowdown is truly a temporary blip caused by Beijing’s pandemic response or a sign that China is splitting from market thinking. In evaluating China’s progress, the data—spanning from 2010 to 2021 and covering financial system development, market competition, trade openness, moves toward a modern innovation system, direct-investment openness, and portfolio openness—shows that China’s economy has unequivocally converged with open market economy norms, although the progress has been uneven. Though China remains behind economies such as Japan, the United Kingdom, and the United States, it has seen significant improvement in innovation and trade, with modest improvements in financial system development. In contrast, its progress in implementing reforms that support market competition and investment openness has been more piecemeal. Looking forward, China’s progress in trade openness and innovation will likely persist. The Twentieth Party Congress signaled no major changes in China’s economic-policy direction and Xi has pointed to trade and innovation as priorities for his third term. Still, there are gaps in that progress, suggesting deeper structural weakness that cannot be overcome quickly—putting China at risk of backsliding. Trade openness Over the past decade, Beijing has focused on integrating its economy with global trade flows of goods. It has lowered the tariffs it applies to imports—going from a mean tariff rate of around 10 percent in 2010 to 7.5 percent in 2021—and has increased the portion of global goods that flow through its economy from around 9 percent in 2010 to 12.5 percent in 2021. As Beijing follows an export-led growth model and pursues new trade deals, such as a possible deal with Uruguay, China’s barriers on trading goods will continue to fall through Xi’s third term. However, China’s trajectory on trade liberalization has not been so unequivocal. Non-tariff barriers on goods, services, and digital trade (alongside subsidies and Beijing’s refusal to adjust exchange rates to correct its balance of payments) muddle the story of China’s progress. Beijing’s restrictions on digital trade are of particular note given the growing significance of digital trade for advanced economies. China’s score in this area has worsened since 2014, a reflection of additional restrictions Xi imposed over the past eight years.

Holiday spending mirrors China's economic vitality China's tourism and consumption have been firing on all cylinders during the just-ended May Day holiday, showing the country's extraordinary economic resilience.To get more china economy news today, you can visit shine news official website. From the latest tourist hotspot Zibo, a low-profile industrial city in east China's Shandong Province now famous for its iconic barbecues, to a camel-riding traffic jam at a desert spot in the northwestern Chinese city of Dunhuang, resorts across the country were swamped with millions of Chinese tourists during the five-day holiday. China's tourism and consumer activities "rose sharply on the first day of the five-day Labour Day holiday" as residents "rushed to travel and spend" after the country optimized its COVID-19 response measures, Bloomberg reported.Eye-catching data related to the holiday has reflected the strong vitality and resilience of the world's second-largest economy. The Chinese people made 274 million domestic trips during the five-day break that began on April 29, soaring 70.83 percent from the same holiday a year earlier, and 19.09 percent more than the holiday in 2019 before the COVID-19 outbreak, the Ministry of Culture and Tourism said. Tourism revenue reached about 21.44 billion U.S. dollars, surging 128.9 percent from last year, according to the ministry. The booming tourism has effectively driven growth in transportation and catering, as well as accommodation and retail trade. From April 27 to May 4, 133 million railway passenger trips were made nationwide, 27.94 million more than during the May Day holiday travel rush in 2019, data from China State Railway Group Co., Ltd. showed.The number of daily passenger trips served by China's railways reached 19.66 million on April 29, a new record high for single-day passenger traffic. Sales of key retail and catering enterprises increased 18.9 percent from the May Day holiday in 2022, according to the Ministry of Commerce. CBS News reported that "China's tourism industry has not missed the chance to cash in," which serves as a boost for the country's economic recovery.China's retail sales of consumer goods rose 5.8 percent year on year to 11.49 trillion yuan (1.67 trillion dollars) in the first quarter, according to the National Bureau of Statistics (NBS). "Consumption growth has picked up significantly in the first quarter as COVID-triggered restrictions on consumption gradually waned and pro-consumption policies paid off," said NBS spokesperson Fu Linghui. He added that consumption is playing an increasingly prominent role in driving economic development, contributing to 66.6 percent of China's growth in the first quarter, which is a remarkable improvement from last year. "Consumption has led China's economic growth so far this year," U.S. news website Axios reported, adding that "record-breaking travel and consumption during the May Day holiday could offer a needed economic boost."

Meet the 4 men tipped to run China’s economy The team of Communist Party officials running China’s economy is about to get a major makeover.To get more china economy news latest, you can visit shine news official website. Party elites have just finalized nominations for key government positions ahead of the annual gathering of the National People’s Congress, the country’s rubber-stamp legislature, which starts on Sunday. They include the four men tipped to manage the world’s second biggest economy: Li Qiang as premier, Ding Xuexiang as executive vice premier, He Lifeng as vice premier and Zhu Hexin as the new central bank chief.No women have occupied these key economic positions in Chinese leader Xi Jinping’s administration. All four are expected to be formally endorsed at the congress. The appointments are seen as part of Xi’s attempt to strengthen the party’s control over the country’s economic institutions, where many Western-educated officials have long influenced policy making.Unlike their predecessors, the four men, who are either close associates of Xi or connected to his trusted aides, haven’t been educated in the West or are perceived to have little experience dealing with international financial organizations. Now all eyes are on how they will help shape policy as the Chinese economy navigates a growing array of challenges, including sluggish consumption, rising unemployment, a downturn in the housing market, lack of business confidence, local governments’ debt distress, an ageing population and increasing tension with the United States over technology sanctions. The congress will set an economic growth target for this year that should be a considerable improvement on last year’s anemic 3%, one of the weakest performances in decades, but which is likely to be a far cry from the pace of expansion China enjoyed before the pandemic. The new team will have to deliver the recovery. Li Qiang A former party boss of Shanghai who presided over the city’s chaotic two-month lockdown, Li Qiang was named the country’s No 2 party official after Xi during the leadership reshuffle in October. That puts the 63-year-old in line to succeed Premier Li Keqiang when he steps down during the upcoming congress.In China’s political system, the premier is traditionally responsible for managing the economy, with several vice premiers supporting his work and taking charge of different issues. Born in the eastern province of Zhejiang, Li started his career as a worker at an irrigation pumping station. He received his undergraduate education in agricultural mechanization at a college in the city of Ningbo and then worked his way up through the provincial bureaucracy. His career took off after he served as Xi’s de facto chief of staff when Xi was the party chief of Zhejiang province between 2002 and 2007. Li would be the first premier since the Mao era not to have previously worked at the State Council, China’s cabinet, as vice premier, analysts say. It was Li’s personal ties with Xi that appear to have clinched his promotion over more qualified candidates, Julian Evans-Pritchard, senior China economist at Capital Economics, said when Li was promoted last year. But some analysts said his tenure in Shanghai, particularly before last year’s Covid lockdown, pointed to a pragmatic, pro-business style. During Li’s time there, Tesla built its first gigafactory outside the United States in the city. Tesla has sole ownership of that factory, the first foreign automaker in China to wholly own its plant. “China’s business environment should turn more friendly, at least, in the coming two years” under Li, who is likely to support private companies and foreign investors, Citi analysts said in a research report. Ding Xuexiang Xi’s current chief of staff, Ding Xuexiang, may become the next executive vice premier, Nomura analysts said on Tuesday, citing their observations based on the ranking of the new Politburo Standing Committee. That means the 60-year-old, who has never led a province or had much experience making economic policy, will likely carry overall responsibility for China’s domestic economy, particularly the country’s fiscal policy. Born in the eastern province of Jiangsu, Ding studied metallurgy at the Northeastern Institute of Heavy Machinery. He began his career at the Shanghai Research Institute of Materials and spent 17 years there, rising from a researcher to deputy party chief. He Lifeng Moreover, He Lifeng, who runs China’s powerful National Development and Reform Commission, may be appointed as the next vice premier in charge of economic, financial and industrial affairs, Nomura analysts said. The 68-year-old would succeed Vice Premier Liu He, who led China’s negotiations with the United States during trade talks in 2018 and 2019. Liu is a Harvard-trained economist who has been called “a bridge between the East and West” by analysts.

China’s economy is undergoing a profound structural slowdown

The ongoing wave of protests in China against the gratuitous zero-covid policies of the government led by Xi Jinping has naturally attracted international attention. The long sequence of lockdowns in almost three years of the pandemic has also disrupted economic activity in many important production hubs in the country.To get more china economy news today, you can visit shine news official website.

The United States is in danger of missing a profound change in the economic component of China’s geopolitical strategy. Chinese President Xi Jinping has downgraded the Communist Party’s ambition to overtake the U.S. in economic size (though that is still officially a goal). Instead, his priority is to minimize China’s dependence on other countries and maximize its ability to coerce them economically. This is an implicit acknowledgment that China can’t achieve the aim of being a truly rich nation anytime soon. But the U.S. cannot afford to be complacent: China can wield its very large economy as a strategic weapon.

Just as the U.S. previously needed to respond to a China that was bent on becoming the world’s foremost economy, Washington now needs to respond to a China bent on long-term economic coercion to secure the interests of the Communist party and the Chinese nation. Domestic action by the U.S. is important, and is easier to achieve, starting with better understanding Xi’s goals. Internationally, to persuade friends and allies to limit their reliance on China, the U.S. must revive a moribund trade policy.

Xi clarified China’s new approach in a series of speeches in 2020, claiming that the “powerful gravitational field” of the state-controlled Chinese market can be used to reshape supply chains in Beijing’s favor. In Xi’s view, this is essential in what he’s called the “great struggle” against Western efforts to limit China’s technological advancement and target its import vulnerabilities.

China has, of course, long engaged in industrial espionage and coercive technology transfer. And Xi’s “Made in China 2025” industrial plan has, since 2015, provided sweeping government assistance to such sectors as semiconductors and electric vehicles. Xi now seems to believe that China must redouble efforts to tilt economic leverage in its favor, as Beijing responds to what it views as an evolving American strategy of containment. Xi may see the decoupling of the two countries’ economies as ultimately inevitable—and may now be actively advancing it, on his preferred terms.
At home, Xi evidently fears that a thriving private sector risks powerful constituencies developing outside party control—he has cracked down on activities perceived as threatening in this respect. With the party determined to retain control of the economy, potentially productive industries face many barriers to expansion. In their place are sectors that serve the party’s interests first. This is not conducive to innovation and scientific breakthrough and, along with deteriorating demographics and high debt, will continue to limit growth.

This hardly means that China has given up on competing with the U.S. and others, but it will do so through state-shaped technological development and, crucially, its preeminent position in global supply chains. China will be neither the world’s low-tech factory nor its leading tech pioneer, but will aim instead to make itself indispensable as a producer of high-value goods upon which even its adversaries depend. This is a perceptive and potentially fruitful alternative to rapid economic growth.

Regarding electric vehicles, for instance, China owns substantial overseas reserves of lithium and cobalt and is rushing to add more. It also seeks to become the premier processor for these minerals. Green-energy equipment may be made elsewhere, but it will rely on Chinese materials. In biopharma, China dominates the production and export of basic pharmaceutical ingredients and is looking to expand final manufacturing of pharmaceuticals.

In aerospace, Airbus, Boeing, and Bombardier will soon face a Chinese competitor, COMAC, whose planes look a lot like theirs. If the Chinese planes improve, the foreign firms will have more trouble selling theirs to China. Then COMAC will start exporting on a large scale, beginning with poorer countries. For semiconductors, the PRC has a strong position in testing and packaging at the end of the supply chain. It seeks to greatly expand the production of low-end chips. Without a better defense against Chinese oversupply, foreign competitors will be killed off, and China could dominate major parts of the industry.

If this proves to be the new order, the U.S. and a few other countries will remain richer than China, and their industries will make big breakthroughs, such as in mRNA vaccines and high-end microchips. Beijing will continue to largely absorb foreign innovation and then eventually drive foreign producers out of business. The dominant feature of the Sino-American commercial competition will not be a race based on economic growth or on technological advancement, as many anticipate. Rather, through subsidies, coercive technology transfer, and unbalanced market access, inferior Chinese firms will win market share at the expense of more dynamic competitors.

China will still seek growth, just not as its main priority. It will spend heavily on science and technology. But its focus will be on strategic economic leverage. Beijing’s theory of victory in this clash is that its combination of strategic planning, manufacturing prowess, and a huge market will undermine foreign innovation, insulate the party from American pressure, and arm Beijing with more tools of economic coercion. This could also force more deindustrialization in the U.S.

China’s Economy Is in Flux

Throw in three years of pandemic-related supply-chain issues, increasing “Buy American” sentiment among policymakers, and a sudden end to China’s zero-Covid policies, and it’s all a lot to keep track of. So where exactly is China’s economy headed? And what does this mean for American businesses?To get more china economy news latest, you can visit shine news official website.

“If you read the news headlines, it does feel like every day, there’s something about China,” says Nancy Qian, a professor of managerial economics and decision sciences at Kellogg and codirector of the Global Poverty Research Lab.

She recently sat down with Kellogg’s Ben Jones, a professor of strategy, and David Dollar, a senior fellow at the Brooking’s Institution, to discuss both the short- and long-term headwinds facing China’s economy. The trio also discuss the challenges that American businesses continuing to do business in China may face; why China’s role in the global supply chain may be irreplaceable; and whether it’s even possible for the world’s two largest economies to “decouple” without causing a tremendous amount of harm.
Laura PAVIN: In recent weeks, China abandoned its controversial zero-Covid approach to the pandemic, which it had maintained for nearly three years. The approach was never particularly popular in the global business community, because it caused havoc to supply chains everywhere. And lifting it is sure to send infections soaring—meaning even more chaos, at least in the short term.

But for economists and policymakers who closely study China, this is hardly the only story. This year, the nation saw its largest democratic protests in decades; and China and Russia declared “no limits” to the partnership between their nations—shortly before Russia invaded Ukraine, significantly ramping up geopolitical tensions with the U.S.

All this, combined with China’s growing economic and military might—and the U.S.’s growing nervousness about how intertwined its economy is with China’s—has American businesses wondering: How should they interact with China?

Nancy QIAN: “So for the last few years, if you read the news headlines, it does feel like every day, there’s something about China.”

PAVIN: That’s Nancy Qian. She’s a professor of managerial economics and decision sciences at Kellogg, and codirector of the Global Poverty Research Lab.

QIAN: And the issues are so complicated, it seems like a good time for us to dig into the minds of people who have been thinking about this from the research community and see what we can learn from them.

PAVIN: This is The Insightful Leader. I’m Laura Pavin. But I’m going to hand the mic over to QIAN for the next episode…to talk about China…and how the economic uncertainty surrounding it could affect its future, and the futures of the countries it does business with.