"Everyone Must Live Well Together... Western-Style Economic Growth Won't Work" Xi Jinping's Determination or Stubbornness

WSJ Points Out "Xi Jinping's Approach as Obstacle to China's Recovery"
"US Escapes Recession Tunnel Through Consumer Stimulus"

Concerns have been raised that the Chinese economy may experience a prolonged recession due to a consumption slump, with analyses suggesting that Chinese President Xi Jinping's opposition to "Western-style consumption-driven growth" is acting as an obstacle to China's economic recovery.

On the 28th (local time), the US Wall Street Journal (WSJ) evaluated that while countries like the United States emerged from the economic downturn tunnel during the COVID-19 pandemic through various consumption support measures and welfare policies, China did not.

The WSJ stated, "If China accelerates its transition to a consumer-driven economy like the US, growth would appear sustainable, but President Xi holds a deeply rooted philosophical opposition to Western-style consumption-driven growth." It pointed out that Xi's avoidance of consumption-centered growth stimulus policies such as real estate market support and household cash assistance is exacerbating the crisis in the Chinese economy.

Xi Jinping: "Common Prosperity is a Long-term Task... Patience is Required"

Chinese President Xi Jinping attended the 2nd Eurasian Economic Forum via video conference in the capital, Beijing, on the 25th. [Image source=Yonhap News]

Earlier, on the 15th, President Xi reiterated his commitment to "common prosperity" in a speech. The content of his speech was published through the Communist Party theoretical journal "Qiushi (求是)."

Xi stated, "(The West) pursued the maximization of capital gains instead of serving the interests of the vast majority of the people, causing wealth disparity and polarization," emphasizing that China would not follow that path.

He continued, "China has made significant progress in enabling the people to share the fruits of development and promoting common prosperity," adding, "Common prosperity is a long-term task."

Considering China's circumstances, Xi also stressed the importance of common prosperity by saying, "We cannot simply follow a well-trodden path," and "We must proceed steadily with patience."

Even Chinese People Lack Confidence in China's Economy

[Image source=Yonhap News]

However, it has been reported that even Chinese people themselves lack confidence in China's growth under these circumstances. UBS, Switzerland's largest investment bank, revealed that last year Chinese households saved 33.5% of their disposable income, surpassing the 29.9% savings rate in 2019. This can be seen as Chinese people increasing savings instead of consumption due to anxiety about the future.

The WSJ pointed out that Chinese authorities have shown resistance to Western-style welfare. Bert Hofman, a professor at the National University of Singapore and former chief economist at the World Bank, said, "President Xi has repeatedly stated that China should not become a Western-style welfare state," and that Chinese authorities have refused to expand welfare such as health insurance and unemployment benefits.

Last year, China's per capita gross domestic product (GDP) was about $12,850 (17 million KRW), which is less than the current World Bank threshold of $13,845 (18.6 million KRW) for classification as a "high-income" country. Foreign media predicted, "The weakening of the Chinese economy could lead to a decline in support for President Xi."

This content was produced with the assistance of AI translation services.