Xi Jinping's First Visit to Shanghai in Three Years Amidst China's Struggling Economy
Chinese President Xi Jinping makes first visit to Shanghai in three years to bolster the country's economy and financial markets amid current challenges
Chinese President Xi Jinping paid a visit to Shanghai for the first time in three years, demonstrating the government's heightened focus on bolstering the country's economy and financial markets. During his trip on Tuesday and Wednesday, Xi toured the Shanghai Futures Exchange, a technology exhibition at the Zhangjiang High-tech Park, and a government-sponsored rental housing community, as reported by the state-run Xinhua News Agency.
Accompanied by high-ranking government officials such as Vice Premier He Lifeng and Cai Qi, his chief of staff, this visit marks his first since 2020. It comes at a time when business confidence in China is dwindling and foreign companies are withdrawing from the country. As the world's second-largest economy, China is experiencing stagnation after years of rapid growth, with challenges including a real estate crisis, high youth unemployment, debt-ridden local governments, and an aging population.
Beijing's increased control over businesses and strained relations with the West are causing foreign investors to be wary. This is evident in the recent decrease in foreign direct investment into China, marking the first negative turn since 1998.
Recent government data revealed that China's official manufacturing Purchasing Managers Index (PMI) dropped to 49.4 in November from 49.5 in October, indicating a continued decline in factory output. This unexpected contraction is due to weak demand and is causing concern among investors.
Xinhua's editorial on Thursday highlighted the significance of General Secretary Xi Jinping's visit to Shanghai, stating that it sends crucial signals at a pivotal moment. The editorial emphasized the need for finance to more effectively support the real economy and noted that Xi's inspection of the Shanghai Futures Exchange demonstrates his strong focus and high expectations for building China into a financial powerhouse.
Xis visit to the sci-tech exhibition emphasized the crucial role of scientific and technological innovation in the country's development, according to the commentary. The president was captured inspecting a walking humanoid robot at the exhibition in a video posted by state television CCTV.
"Shanghai must lead the country's reform and opening up and be at the forefront of its technological innovation and development," Xi was quoted as saying by Xinhua.
Recently, the government of Xi has increased its efforts to boost economic growth and stabilize the financial markets. This included relaxing capital controls in Beijing and Shanghai to attract foreign investors in September, and the parliament approving one trillion yuan ($138 billion) in extra sovereign debt for infrastructure spending in October.
On Monday, Xi hosted a leadership meeting in Beijing to establish guidelines for further promoting the development of the Yangtze River Economic Belt, encompassing Shanghai and ten other provinces and cities along the river. The area represents 47% of China's GDP and more than 40% of its population.
Earlier this month, Xi made his first visit to the United States in more than six years, meeting with President Joe Biden to improve relations between the two countries. During a meeting with top American business executives, Xi promised to streamline the process for foreigners to invest and operate in China and committed to creating a "world-class business environment."
