Chinese economy shows some life amid 'difficulties and challenges'

"To further promote economic recovery, we need to overcome some difficulties and challenges." "Difficulties and challenges" is an official phrase lifted from the ruling Chinese Communist Party's recent Central Economic Work Conference in Beijing, and refers to a collapsed property bubble, weak domestic demand, crippling government debt and dwindling investor confidence, among other things. His words echoed those of Chinese leader Xi Jinping, whose economic policy revolves around top-down party control of financial markets and the expansion of state-owned enterprises, who sees the expansion of domestic demand and consumption as the key to post-lockdown economic recovery. U.S. Treasury Secretary Janet Yellen warned on Thursday that Xi's economic policy, including raids on foreign companies, could discourage foreign investors and affect economic growth. "He has continued to intensify his efforts to control economic life at the political level ... but economic laws won't obey the party's command," he said. "The two main reasons that they haven't managed to rescue the Chinese economy so far are the bankruptcy of the Chinese government's credibility and the collapse of confidence in Xi Jinping," Tang said. Chinese leaders agreed at the Central Economic Work Conference to run a budget deficit of 3% of gross domestic product in 2024, Reuters quoted three sources with knowledge of the matter as saying on Friday, adding that other fiscal support may be covered by off-budget debt.