In Chinese President Xi Jinping’s strategy for securing his country’s rise, the Communist Party keeps a firm grip on the economy, steering it out of an old era dependent on real estate and smokestack industries to a new one driven by innovation and consumer spending.
But he may have to relinquish some of that control as the strategy comes under pressure.
Consumers are gloomy. Private investment is sluggish. A big property firm is near collapse, and local governments face crippling debt. Youth unemployment has continued to rise. The economic setbacks are eroding Xi’s image of imperious command, and emerging as perhaps the most sustained and thorny challenge to his agenda in more than a decade in power.