Chinese President Xi Jinping addressed a 3,000-person reception at the Great Hall of the People in Beijing on Monday, delivering an address on the eve of National Day that contained familiar calls for “national rejuvenation” and “Chinese modernization,” while reiterating a claim that “Taiwan is an integral part of China's territory.”
On the economy, Xi warned banquet attendees that, “the road ahead won’t be smooth and flat, there will be difficulties and obstacles ... high winds and rough seas, even stormy seas.”
Xi’s speech comes days after Beijing unleashed long-awaited stimulus measures, giving Chinese stocks their best week in 16 years.
On September 24, the People’s Bank of China (PBOC) cut interest rates, reduced the cost of existing mortgages, and lowered Chinese banks’ reserve requirement ratio by 0.5 percentage points, reportedly freeing up a US$141 billion in liquidity.
Beijing also issued a rare one-time “allowance” to “disadvantaged people” in advance of National Day and established a monthly ‘baby bonus’ for families of C$153 per child, minus the first child.
Economic challenges persist
Although welcomed by many inside and outside of China, the stimulus package by itself is unlikely to resolve the serious structural challenges facing the Chinese economy, including overcapacity issues, which have dogged relations with countries such as Canada and the U.S.
Chinese economist Yu Yongding, a former PBOC policy adviser, said last week that a complementary fiscal package would be necessary to achieve Beijing’s GDP aim of “around five per cent.”
A survey conducted from 2004-23 found that Chinese respondents are increasingly “pessimistic” about their economic futures and, compared to 2004, fewer are now convinced that “hard work pays off.”
