China’s High-Wire Act: Downshifting Growth Without Slipping Into Stagnation
BEIJING—It is the end of the Chinese growth miracle as we know it, and Chinese leader Xi Jinping seems fine with that. The question now is whether he can steer the country onto a new course—and keep the rest of China on board. After three years of pandemic-era distortions, the longer-term trajectory of the world’s second-largest economy is coming into focus, and it is showing a plateauing of growth that would have alarmed previous Chinese leaders.
Xi, however, has different priorities. He has made clear in recent years that growth at all costs isn’t what he is interested in. What he wants instead is what he calls “high-quality development," a somewhat nebulous concept that economists and advisers say includes a greater emphasis on national security, political stability and social equality.
With his increased focus on ideological purity, he cares less about keeping up appearances for the markets—as evidenced by a surprise announcement on Monday that Beijingis axing Premier Li Qiang’s annual appearance before journaliststo field questions on the economy. Xi is willing to accept slower growth in return for advancing these goals because he thinks the new priorities will strengthen Communist Party control and bolster China’s ability to stand up to Western powers, helping restore the country to its rightful place in the world. Carrying out a transition from rapid growth to a slower pace is a tricky challenge for any government.
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