China’s Slowdown Isn’t Xi’s Biggest Problem
The Chinese leader could soon find himself staving off two different economic crises. One threatens his hold on power.
Xi sees a sea of red.
Photographer: Michele Spatari/Bloomberg
The Chinese proverb, “disasters come in pairs,” aptly describes the dilemma facing President Xi Jinping. China’s real economy is stuck in neutral. Growth slumped to a paltry 0.8% in the second quarter. Youth unemployment is so high the government has stopped releasing the embarrassing figures. Analysts are warning that the country’s four-decade growth miracle has ended and China may never surpass the US to become the world’s leading economy.
As concerning as the slowdown may be, however, its political repercussions should be manageable. The real threat to Xi’s hold on power is the other potential disaster looming in front of him and China: a financial meltdown.