Xi: Tough challenges remain in China’s fight against Covid-19

Bloomberg

President Xi Jinping said tough challenges remain in China’s fight against Covid-19 and acknowledged divisions in society that led to rare spontaneous protests, after weeks of silence on a virus policy pivot that’s infected hundreds of millions and delivered a severe blow to economic activity.
In a New Year’s address, Xi said the country is in a new phase of Covid control and has adapted after following a science-based and targeted approach. He said earlier the nation’s strategy had been “optimised” to protect people’s lives and minimise economic costs.
The government took definitive easing steps from its harsh zero-tolerance approach to containing Covid, which had included snap lockdowns, frequent mass testing and largely closed borders.
Xi had repeatedly defended the strategy despite mounting economic costs, including as late as mid-October.
The Chinese leader addressed the hardships endured by the nation’s people during strict lockdowns, as well as in the rapid spread of Covid.
“Since Covid-19 struck, we have put the people first and put life first all along,” Xi said. “With extraordinary efforts, we have prevailed over unprecedented difficulties and challenges, and it has not been an easy journey for anyone. We have now entered a new phase of Covid response where tough challenges remain.”
Without directly referring to the protests, Xi said in his speech that it’s “only natural” for the country’s 1.4 billion people to have different concerns and views on some issues. “What matters is that we build consensus through communication and consultation,” he said.
On top of repeated Covid outbreaks, China’s economy in 2022 muddled through a persistent property market slump, sluggish consumer demand and waning overseas appetite for its goods.
Xi’s televised broadcast came after data showed economic activity in December contracting the most from the previous month since February 2020. Home sales continued to slump in December, while reports due this week are forecast to show a further squeeze in the manufacturing and services sectors.
While analysts forecast growth slowed to 3% in 2022, Xi said China’s gross domestic product exceeded 120 trillion yuan ($17.4 trillion) last year, suggesting the economy expanded at least 4.4%.
Xi is betting an economic rebound this year will help the nation through the shock, with officials vowing at a recent meeting of the 24-member Politburo to revive consumption and support the private sector.
China’s central bank pledged to support domestic demand and maintain “effective” growth of credit.