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China’s Communist Party Faces Up to Slower-Growth Years Ahead

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BEIJING—China’s Communist Party said it was prepared to accept lower rates of economic growth as it sought to manage longer-term risks, on the eve of a political conclave that will help to chart the country’s path in the years ahead.

On Sunday, the party will convene the 20th party congress, a twice-a-decade gathering of top leaders, at which President Xi Jinping is widely expected to break with recent precedent and secure a third term in power.

Speaking at a press conference on Saturday in Beijing, a spokesman for the party congress, Sun Yeli, said China’s pace of economic output “is no longer the only thing that matters.”

“The speed of growth is indeed an important yardstick of economic performance but not the only one,” Mr. Sun said. “Instead we focus more on fundamentally resolving the longer-term issues in the economy.”

Guards stand on Beijing’s Tiananmen Square near the Great Hall of the People, where the Communist Party is set to hold a dayslong gathering.



Photo:

Ng Han Guan/Associated Press

Mr. Sun acknowledged the downward pressure facing China’s economy. As a result, many economists have downgraded their expectations for China’s growth this year, and the country will almost certainly miss its stated target of about 5.5% expansion of gross domestic product.

“Given the size of the Chinese economy, being the world’s second-largest, it is no easy task to maintain such speed of growth as it shifts to high-quality development,” Mr. Sun said.

A big reason for the lackluster growth, with GDP expanding just 0.4% in the second quarter compared with a year earlier, is China’s stringent approach to controlling the spread of Covid-19. Despite the widespread availability of vaccines, China continues to strictly control the movements of people and has at times resorted to locking down entire cities, including the economic hub of Shanghai. Such measures have increasingly frustrated many Chinese people.

Mr. Sun defended China’s approach to the virus and provided no hint at when or if the country might change course. Many Chinese and foreign executives, who have been cut off from their offices in China as well as their vendors and customers since the pandemic began, have been hoping for a change in China’s so-called “zero Covid” policy after the party congress finishes.

“All things considered, China’s Covid response measures are the most economical and the most effective,” Mr. Sun said. “We firmly believe that light is ahead of us.”

The handling of Covid-19 is just one of several issues facing China’s economy today. Besides the virus, disruptions stemming from the conflict in Ukraine, a sharp slowdown in China’s real-estate sector and worsening tensions with the U.S. all present risks.

Residents wait at a Covid-19 testing station in the southern Chinese city of Dongguan.



Photo:

Qilai Shen/Bloomberg News

On Sunday, Mr. Xi is slated to deliver a closely watched report that will review the party’s work over the past few years and will likely also provide insights about its priorities in the years ahead. Mr. Sun said the party congress will conclude on Oct. 22, after which the country’s new Politburo Standing Committee, China’s top decision-making body, will be unveiled.

Since coming to power in 2012, Mr. Xi has fostered a higher degree of nationalism in China alongside a greater role for the state in economic development, hallmarks of his administration that most analysts believe will continue if he succeeds in keeping power. Many private businesses have been squeezed as Mr. Xi has prioritized the role of state-owned companies.

Ties with the U.S. have sharply deteriorated during Mr. Xi’s first decade. The relationship has been battered by numerous issues, including the trade war by the Trump administration, rising tensions over Taiwan and most recently by the Biden administration’s efforts to restrict U.S. exports to China of advanced chips and chip-making equipment.

At the press conference, Mr. Sun struck a softer tone toward the U.S. compared with other recent official statements. He said that the most pressing issue in international relations over the coming years will be for the U.S. and China to find a way to get along.

“We take the view that China and the U.S. have more common interests than differences,” he said. “A sound and stable bilateral relationship serves the common interests of the two peoples.”

Write to Brian Spegele at [email protected]

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