Xi claims Taiwan and China will 'surely be reunified' during New Year's Eve address
What does it mean for U.S. defense spending?
Chinese President Xi Jinping, in his annual New Year's Eve address, claimed that Taiwan would "surely be reunified" with China. This comment reemphasizes last months meeting with President Biden when Xi “bluntly” told Biden that China “will” unify with Taiwan, but he dismissed the 2025-2027 timetable hyped in Western press.
Taiwan is approaching its January elections which will shape their foreign policy and defense posture. In the lead-up to the elections, China has intensified its military activities around Taiwan and declared its right to employ "all necessary measures" in response to external interventions that disrupt unification.
Is President Xi saber rattling to distract from problems at home?
Xi’s statements and meetings seem designed to distract from systemic stresses in country. Moody’s downgraded China’s A1 credit rating from stable to negative last month. Stalled productivity growth, the politicization of business, rapid ageing, and high youth unemployment effect China’s economic posture. Looking ahead to 2024, the country will face even more daunting challenges. Chinese industrial policy has resulted in excess capacity in steel and renewables, and is now being reflected in Chinese electric vehicle and battery production. The Chinese auto industry currently produces at less than 60% its capacity utilization, just one symptom of larger, more complex challenges.