Yuan Watch : Weakening Advantages

December 01, 2008
Jane Macartney in Beijing
timesonline.co.uk

The Chinese President has issued a rare warning to the ruling Communist Party, telling his officials that the global economic downturn is so severe that it could shake its 59-year grip on power.

President Hu Jintao's remarks, at a weekend meeting of the ruling 25-member Politburo, appeared on the front page of the party's official mouthpiece, the People's Daily. It was his bluntest message yet delivered on the crisis to China's 1.3 billion people and more than 70 million members of the party.

The subtext of his speech was the increasing risk of social unrest caused by China's rising unemployment, as a slump in exports leads to factory closures and a fall in property sales results in abandoned construction projects.

The President, who is also the head of the Communist Party, said: “In this coming period, we will starkly confront the effects of the sustained deepening of the international financial crisis and pressure as global economic growth clearly slows.” He said that the slowdown would “steadily weaken our country's traditional competitive advantages”.

Mr Hu said: “Whether we can turn this pressure into momentum, turn challenges into opportunities, and maintain steady and relatively fast economic development ... is a test of our Party's capacity to govern.”