China in 2024: Economic Trials and Geopolitical Maneuvering

China in 2024: Economic Trials and Geopolitical Maneuvering | OilPrice.com

It’s that time again. As a new year begins, here’s a look ahead at the big things that I’m following for the upcoming year for China across Eurasia.
But before unpacking all of that lower down, let's examine two big issues that will shape China’s year as a whole: its struggling economy and Taiwan.

Finding Perspective: 2023 was mostly bad news for the Chinese economy.

The post-pandemic recovery never really took hold. Adding to that is a property crisis that has real estate giants on the brink of collapse, foreign direct investment leaving the country at an alarming rate, and widespread disillusionment among the population now that the days of uninterrupted high growth are over.

Chinese leader Xi Jinping made a rare admission about the dire state of the country's economy during his New Year’s Eve speech.

Acknowledging the “headwinds” facing the country, Xi admitted in the televised speech that “some enterprises had a tough time. Some people had difficulty finding jobs and meeting basic needs.”

“All these remain at the forefront of my mind,” Xi said in his remarks, which were widely circulated by state media. “We will consolidate and strengthen the momentum of economic recovery.”

The comments were the first time Xi has mentioned economic challenges in his annual New Year’s messages since he started giving them in 2013.

Xi also used his speech to talk about Taiwan, which Beijing believes should be reunified with the Chinese mainland, ideally peacefully, though it does not rule out force.
The Chinese leader said that Taiwan would “surely be reunified” with China, which he added was part of the “same family” as the island nation.

Why It Matters: Those comments from Xi follow a similar line to past remarks, but they hold new weight with Taiwan’s presidential election set for January 13.

Current Taiwanese Vice President Lai Ching-te, who serves under President Tsai Ing-wen and is a member of the Democratic Progressive Party (DPP), holds a narrow lead in the polls.

His election could lead to even starker cross-strait tensions. Lai is strongly opposed to the Chinese Communist Party, and while he won’t call for formal Taiwanese independence, he’s also said that Taiwan’s sovereignty is “a fact.” It’s for these reasons that Beijing harshly criticizes him as a secessionist.

Beijing has stepped up its rhetoric ahead of the election, and a Lai victory would likely prompt aggressive moves from Beijing, including naval maneuvers and airspace intrusions. How Beijing reacts will shape its year and have an impact on its economy and its relationship with the United States.

Xi and U.S. President Joe Biden’s November summit in San Francisco brought a cooling-off period to the relationship, but structural tensions mean that a new crisis could quickly heat things up again.

One school of thought says that, given the internal difficulties facing China, Xi won’t look to create new problems.

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Xi is hoping to slow U.S. curbs on tech exports that are hurting the economy, while Beijing is in the midst of a charm offensive across Europe aimed at taking advantage of European worries about another Trump presidency. A mini-crisis over Taiwan’s election could jeopardize that and sour any goodwill for China in the process.

But Taiwan is also an intrinsic issue for Beijing, and Xi may feel that he has no choice but to react strongly in a way that will force the world to take notice.

By RFE/RL

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