Xi Jinping frames weak demand as economic security threat
The Party leadership made boosting consumption the top priority for 2025 at December's Central Economic Work Conference (CEWC).
- Now we know more about what the big man thinks is at stake.
On Friday, Qiushi, the Party’s top journal, published excerpts of Xi Jinping's remarks at the CEWC, where he framed weak demand as a threat to economic security:
- “Expanding domestic demand is not just about economic stability but also economic security – it’s a strategic move, not a short-term fix.”
Xi wants demand, and consumption, to drive growth, not drag it down:
- “We need to accelerate efforts to address weaknesses in domestic demand, especially consumption, so that domestic demand becomes the main driver and stabilizing anchor of economic growth.”
Get smart: Faced with the prospect of a worsening trade war with the US and escalating trade tensions with the EU, the Party is bracing for a collapse in external demand.
- If internal demand can't pick up the slack, growth could slow sharply, straining industrial output, employment, and local government revenues.
Get smarter: This is the first time Xi has publicly framed weak demand as a security issue.
- Playing the security card will have lit a fire under officials to prioritize boosting consumption and demand.
What to watch: Will Premier Li Qiang put the government's money where the Party’s mouth is in his Government Work Report on Wednesday?
- Look for increased spending on the public safety net, trade-in programs, and buybacks of property and idle land from developers – all crucial for driving demand in 2025 and beyond.