Beijing – Prime Minister Li Keqiang admitted that China’s economy is slowing down. Over the past few months, while China’s economy consistently faces jolts, its growth rate is steadily declining. Many financial institutions have pointed to the slowdown in China’s economy and have predicted that its impact would intensify further. The US think tank claims that Xi Jinping’s leadership may face a challenge at the Communist Party convention scheduled next year because of the hits to the economy.
China’s communist regime had launched a crackdown on large private sector companies last year. Subsequently, the debt burden began to jolt the Chinese real estate companies. Around this time, the energy crisis intensified as demand for electricity in China increased. It also adds to restrictions imposed to prevent corona outbreaks. All of these have begun to show an impact on China’s economy with a fall in economic growth. Chinese officials and the system claim that economic reforms bring about change without directly acknowledging the decline.
Against this backdrop, Prime Minister Li Keqiang acknowledging a slowdown in the economy becomes significant. Although Prime Minister Keqiang has not clarified the reasons behind the recession, he has hinted at some measures to get out of it. This includes tax relaxations for small and medium enterprises as well as proposals to reduce various charges. Simultaneously, considering a long-term performance of the economy will require tough decisions on monetary and credit policy, he warned.
Repercussions of Keqiang’s confession have been felt in the Chinese stock market. In China, Shanghai, Shenzhen and CSI300 indices have all fallen. The Hang Seng Index in Hong Kong also fell by 1%. In the last few weeks, the stock market jolted due to actions against private companies and developments in the real estate sector. Analysts say that a recent mention of a slowdown in the economy by Kekiyang only adds more to the fears and insecurity among Chinese investors.
The impact of the fall in China’s economy is also seen on the ruling Communist Party, claims a US study group Jamestown Foundation. The convention of the Communist Party will be held next year. It will seal the leadership of the party and the country. Until last year, it was believed that both positions would stay with Jinping and he would hold them to the end.
Whereas, in the wake of the jolts to the economy, the shocks have started to subside China’s internal political system. It has emerged that a group within the Communist Party is reportedly dejected with Jinping. The group includes Zeng Qinghong, a close associate of former President Jiang Zemin, and Vice President Wang Qishan, claims the US think tank. The opponents have initiated activities against Jinping with the help of the party and security agencies, said the US think tank. The Jamestown Foundation claims that Jinping’s grip on the party has weakened over the past decade and that his loyal allies have joined the opposition group.