Xi Jinping visits financial hub Shanghai for first time in three years as Chinese economy sputters

Chinese leader Xi Jinping has visited Shanghai for the first time in three years, as his government steps up efforts to prop up the country’s economy and financial markets.

Xi made the trip on Tuesday and Wednesday and he visited the Shanghai Futures Exchange, a tech exhibition in the Zhangjiang High-tech Park, and a government-subsidised rental housing community, according to state-run Xinhua News Agency.

He was accompanied by top government officials, including Vice Premier He Lifeng and Cai Qi, his chief of staff.

The visit, his first since 2020, comes as business confidence wanes in China and foreign companies pull out of the country. The world’s second largest economy is stagnating after decades of rapid expansion. It’s beset with a series of problems, including a real estate crisis, record youth unemployment, debt-ridden local governments, and a rapidly ageing population.

Beijing’s tighter business control and strained relations with the West are scaring away foreign investors. A gauge of foreign direct investment into China has turned negative for the first time since 1998.

On Thursday, data released by the government showed the official manufacturing Purchasing Managers’ Index slipped to 49.4 in November from 49.5 in October, signalling a further contraction in factory output. Last month, the PMI unexpectedly shrank from September amid weak demand.

“General Secretary Xi Jinping’s visit to Shanghai sends important signals at a critical moment,” an editorial by Xinhua said Thursday.

“Finance should better serve the real economy,” it said, adding that Xi’s inspection of the Shanghai Futures Exchange showed his “high priority and ardent expectations” towards building China into a financial powerhouse.

Xi’s visit to the sci-tech exhibition highlighted the “core position” of scientific and technological innovation in the overall development of the country, the commentary said. The president was seen inspecting a walking humanoid robot at the sci-tech exhibition, according to a video posted by state television CCTV.

“Shanghai must be a vanguard of the country’s reform and opening up and a pioneer in its tech innovation and development,” Xi was quoted as saying by Xinhua.

In recent months, Xi’s government has ramped up efforts to promote growth and stabilize the financial markets.

In September, regulators relaxed capital controls in Beijing and Shanghai to entice foreign investment. In October, the parliament approved one trillion yuan ($138 billion) in additional sovereign debt intended for infrastructure spending.

On Monday, Xi hosted a leadership meeting in Beijing, which set the guidelines on how to further promote the development of Yangtze River Economic Belt, an area that comprises Shanghai and ten other provinces and cities along the Yangtze River. The area accounts for 47% of China’s GDP and more than 40% of its population.

Earlier this month, Xi visited the United States for the first time in more than six years, where he met with President Joe Biden to amend ties between the two countries. In a meeting with top American business executives, Xi pledged to make it easier for foreigners to invest and operate in his country and vowed to create “a world-class business environment.”