China’s Xi Jinping to resist market pressure to step up stimulus efforts

Beijing is expected to resist market pressure for a much stronger stimulus to spur China’s economic recovery at its flagship annual political event this week, with President Xi Jinping focused instead on the longer-term goal of turning the country into an advanced manufacturing superpower, analysts have said.

Thousands of delegates from all over China will descend on Beijing for the opening session of the National People’s Congress, the rubber-stamp parliament, on Tuesday where Xi’s number two official, Premier Li Qiang, is expected to deliver a “work report” outlining the country’s targets for economic growth and military spending as well as policy priorities.

The NPC meeting will be scrutinised for signs of how the Communist party, which will celebrate the 75th anniversary of the People’s Republic of China this year, plans to deal with what analysts see as multiple geopolitical, demographic and economic hurdles facing the country.

These range from a real estate crisis, deflationary pressures and flagging investor confidence — reflected in record low foreign direct investment in 2023 and stock market falls this year — to growing European and US resistance to China’s exports, especially of electric vehicles.

“The government work report will aim to revive consumer and business confidence . . . through stimulus measures and measures to support the private sector,” said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis.

He added, however, that any such proposals would be relatively restrained. “Xi doesn’t seem to be panicking and turning to massive stimulus or new approaches to try and revive growth. Xi sees China’s current economic wobbles as the short-term pain necessary to achieve the long-term gain of his vision of ‘high-quality development’,” Thomas said.

Analysts believe that based on provincial forecasts for gross domestic product growth this year, Li will set a…