Chinese slump means basic needs not being met, admits Xi

XI JINPING has admitted people are struggling to find jobs and “meet basic needs” in China as fresh data pointed to a continued slowdown at factories and in the housing market.

In a rare admission of economic weakness made in his new year message, the Chinese president acknowledged that businesses had faced a “tough” year in 2023, adding that “some people had difficulty finding jobs and meeting basic needs”.

His comments came amid further signs of economic slowdown yesterday as new data showed China’s factory activity had contracted to its weakest level in six months.

The official purchasing managers index (PMI) for manufacturing declined to 49 in December, down from 49.4 in November, to reach its lowest level since June, according to the National Bureau of Statistics.

Any score of below 50 indicates a contraction in economic activity.

Kelvin Lam, at Pantheon Macroeconomics, said Chinese manufacturing “continues to flounder” despite Beijing’s efforts to prop up the economy.

“The impact of the recent fiscal stimulus is yet to be felt in the economy,” he

‘Manufacturing continues to flounder. The impact of the recent fiscal stimulus is yet to be felt in economy’

said, noting that reconstruction efforts in regions hit by natural disasters have been slowed by harsh winter weather.

Meanwhile, a fall in new home sales also accelerated in December.

The value of new homes sold by the country’s 100 biggest property companies fell by almost 35pc from a year earlier to 451.3bn yuan (£50bn).

Sales for 2023 as a whole were 16.5pc lower than in 2022 – a more severe fall than earlier forecasts of 15pc.

In his televised address yesterday, President Xi said the Chinese government’s plans were aimed at “delivering a better life for the people”.

He added: “Our children should be well taken care of and receive good education, our young people should have the opportunities to pursue their career and succeed, and our elderly people should have adequate access to medical services and elderly care.”

Youth unemployment rocketed to a record 21.3pc in June 2023.

Analysts at Goldman Sachs believe China’s GDP grew by 5.3pc in 2023, but expect growth to slow to 4.8pc in 2024 before worsening to 4pc in 2026.

President Xi said: “We will work to achieve steady and long-term economic development.”