China’s leaders announced an ambitious annual GDP growth target of 5% and new stimulus measures aimed at fending off economic stagnation that is contributing to rising social discontent.
Premier Li Qiang highlighted new fiscal and monetary measures aimed at boosting “sluggish” consumption in his report on March 5 to some 3,000 delegates at the annual meeting of the National People’s Congress, China’s parliament. China’s foundation for a sustained economic recovery “is not strong enough,” he warned.
China’s economy faces new headwinds from what Mr. Li called an “increasingly complex” international environment, as the United States raised tariffs on Chinese goods to 20% this week, prompting Beijing to retaliate with tariffs on US agricultural products and sanctions on American firms.
Why We Wrote This
China’s sluggish economy is denying its citizens the job opportunities they had been led to expect. Increasingly they are protesting, or even using violence, to express their grievances.
Beijing’s moves to boost the economy and private sector come amid signs that pocketbook issues are triggering deepening social unrest.
“Achieving a level of growth is important for political reasons. One of those is social stability,” says Neil Thomas, a fellow on Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. “[Public] sentiment has been as negative as I’ve known it to be in China over the last couple of years,” marking a low point in the 12-year rule of Chinese leader Xi Jinping, he says. “That’s got to be concerning.”
Growing discontent
The economic malaise has left China’s citizens far more pessimistic than in past decades about their prospects of getting ahead. Many complain that they cannot advance because the system is unfair and perpetuates inequality, surveys show.
Dissent in China surged last year, according to the China Dissent Monitor (CDM), which tracks protests and other collective actions. Protests increased by 21% in the last quarter of 2024, compared with the same period in 2023, according to CDM, a project of the Washington-based human rights group Freedom House.
Three-quarters of the 7,000 incidents logged since 2022 were sparked by economic grievances such as unpaid wages, housing disputes, and confiscation of rural land by local governments.
In recent years, China’s stringent pandemic lockdowns, the collapse of the housing market, and regulatory crackdowns have undermined consumer spending and business confidence. Youth unemployment has soared, as millions of young people struggle to find jobs.
“This prolonged economic downturn appears to be generating more economic hardship for Chinese people, which leads to more frequent protest,” said a spokesperson for the China Dissent Monitor in an email.
“Revenge attacks” on the rise
Meanwhile, an unusual spate of mass-casualty attacks against innocent bystanders has hit cities across China in the past year, including stabbings and car-ramming rampages. Overall, more than 60 people were killed and over 160 injured in the violence.
Dubbed “revenge against society” attacks, they have reportedly been carried out by perpetrators who were troubled by debt, low-paying jobs, property disputes, and other problems.
The heightened repression and social control that Mr. Xi has imposed on Chinese society have limited institutional channels for resolving conflicts, experts say. That may have prompted citizens with grievances to protest or lash out violently.
“The space for [addressing grievances] has really been narrowing under Xi Jinping, and that makes the authoritarian system much more rigid,” says Sarah Cook, an independent China expert and author of the UnderReported China blog. “That then contributes to people taking to the streets … and potentially … more desperate attacks,” she says.
The government’s response to the rising protests and mass attacks has been to intensify police surveillance. “We must … maintain high vigilance as if treading on thin ice” and “intensify efforts to combat and prevent such incidents,” said a late November commentary in the Communist Party mouthpiece People’s Daily. “Taking revenge on society … is an unforgivable act,” it said.
After a man plowed his car into people exercising outside a sports center in the southern city of Zhuhai, Guangdong province, in November, killing 35 people and injuring 43, Mr. Xi publicly intervened.
In a rare move, the president called for the perpetrator to be severely punished. He was sentenced to death in December and executed three weeks later.
High inequality persists
In December, top Party leaders raised fresh concerns about the need to maintain social stability and “ensure people’s livelihood” at an annual economic work conference. And in a Chinese New Year’s speech, Mr. Xi acknowledged challenges facing the economy and said he was “always thinking” about employment issues.
At this week’s National People’s Congress, Premier Li announced several new economic stimulus measures. The government will allow the fiscal deficit to rise from 3% to 4% of GDP – signaling that it will spend more in its bid to rescue the economy.
Boosting consumption and overall demand is the government’s top priority this year, Mr. Li said. To that end, he announced, it will issue 300 billion yuan ($41 billion) in special bonds to support consumer goods trade-in programs.
Still, experts remain skeptical that Beijing will be able to significantly increase demand. “People aren’t spending very much. Confidence is very low,” says Mr. Thomas. “Beijing has quite a history … of making big statements on the importance of … increasing consumption … then not being able or willing to follow through.”
More broadly, experts question whether Mr. Xi’s economic strategy will alleviate China’s persistently high levels of inequality, which feeds social instability. They say that the president’s approach, prioritizing high-tech industries, will continue to leave behind the large part of the working population that is rural and less educated.
“China now is maybe joining the rest of the world, where optimism is much less pervasive than it was in earlier decades,” says Martin King Whyte, sociology professor emeritus at Harvard University, who has conducted decades of opinion surveys in China.
“People are less likely to blame themselves if they are not doing well,” he says. Instead, they put the onus on “the unfairness of society.”
