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China s economic setbacks are challenging Xi Jinping s strategy for securing the country s rise and eroding his image of imperious command. The slump in housing sales, which was partly caused by Xi s crackdown on excessive borrowing by developers, has had a ripple effect on the broader economy. To spur growth, the government may have to give more freedom to private businesses and provide financial support to debt-laden local governments. However, Xi s highly centralized leadership may limit the circle of decision-makers.
The slowdown is posing perhaps the most sustained challenge to President Xi Jinping’s agenda in over a decade in power. He now faces a tangle of difficult choices.