China’s Xi Jinping visits the financial hub of Shanghai as the Chinese economy falters

Li Xueren/Xinhua/Getty Images/File

Chinese President Xi Jinping is visiting Shanghai for the first time in three years.

Hong Kong
CNN
—

Chinese leader Xi Jinping visited Shanghai for the first time in three years as his government steps up efforts to shore up the country’s economy and financial markets.

According to state news agency Xinhua, Xi made the trip on Tuesday and Wednesday and visited the Shanghai Futures Exchange, a technology exhibition at Zhangjiang High-Tech Park and a government-subsidized rental housing community.

He was accompanied by senior government officials, including Vice Premier He Lifeng and Cai Qi, his chief of staff.

The visit, his first since 2020, comes as business confidence in China is waning and foreign companies are leaving the country. The world’s second largest economy is stagnating after decades of rapid expansion. It is beset by a number of problems, including a housing crisis, record-breaking youth unemployment, over-indebted local governments and a rapidly aging population.

Beijing’s tighter business controls and strained relations with the West are deterring foreign investors. An indicator of foreign direct investment in China has turned negative for the first time since 1998.

On Thursday, data released by the government showed the official manufacturing purchasing managers’ index fell to 49.4 in November from 49.5 in October, pointing to a further decline in factory output. Last month, the Purchasing Managers’ Index fell unexpectedly compared to September due to weak demand.

“General Secretary Xi Jinping’s visit to Shanghai sends important signals at a critical moment,” said a Xinhua editorial on Thursday.

“Finance should better serve the real economy,” it said, adding that Xi’s inspection of the Shanghai Futures Exchange showed he has “high priority and high expectations” of turning China into a financial power.

Xi’s visit to the science and technology exhibition highlighted the “core position” of scientific and technological innovation in the country’s overall development, the commentary said. According to a video released by state television CCTV, the president was seen inspecting a walking humanoid robot at the science and technology exhibition.

“Shanghai must be a pioneer in the country’s reform and opening-up and a pioneer in its technical innovation and development,” Xi was quoted as saying by Xinhua.

In recent months, Xi’s government has stepped up efforts to promote growth and stabilize financial markets.

In September, regulators relaxed capital controls in Beijing and Shanghai to attract foreign investment. In October, parliament approved an additional 1 trillion yuan ($138 billion) in government debt for infrastructure spending.

On Monday, Xi held a leadership meeting in Beijing that set guidelines for further promoting the development of the Yangtze Economic Belt, an area that includes Shanghai and 10 other provinces and cities along the Yangtze River. The territory accounts for 47% of China’s GDP and more than 40% of its population.

Earlier this month, Xi visited the United States for the first time in more than six years, where he met with President Joe Biden to improve relations between the two countries. At a meeting with top American business leaders, Xi pledged to make it easier for foreigners to invest and do business in his country and vowed to create “a world-class business environment.”