China’s economy is “more stable and dynamic than before,” President Xi Jinping said in his New Year’s address on Sunday, AFP and Reuters reported.

During 2023, the country’s economy has weathered the storm, the Chinese president added, speaking on a channel quoted by the official CCTV news agency.

“We must comprehensively deepen reform and opening-up, further strengthen confidence in development, enhance economic vitality, and make more efforts to promote education, science and technology development, and talent development,” Xi said.

The world’s second-largest economy, burdened by a costly solution to the Covid-19 crisis, barely recovered in 2023.

Record levels of youth unemployment, a lack of consumer confidence and a lingering debt crisis in the key real estate sector also weighed on growth.

Manufacturing activity in China continued to contract in December, according to official data released on Sunday.

The purchasing managers’ index (PMI), which reflects the state of the industrial world, came in at 49.0, the National Bureau of Statistics (NBS) said, compared with 49.4 in November. This is the third month in a row that the index has fallen.

In recent months, Beijing has announced a series of targeted measures and a large issuance of government bonds to boost infrastructure spending and stimulate economic activity.

But the results of such a policy are still mixed: the PMI index has crossed into positive territory only once in the last nine months.

Despite some encouraging signs, such as China’s better-than-expected 4.9% GDP growth in the third quarter, Beijing is likely to struggle to meet its annual growth target of around 5%, the most modest in years.