Xi Jinping’s consolidation of power has cleared the path for him to break China’s cycle of debt-driven growth and put the economy on a more sustainable footing. But there’s a big problem: he’s failing to convince the nation that’s a good idea.

As the world’s second-biggest economy undergoes a prolonged slowdown, Xi’s move to shun the old playbook of unleashing broad stimulus is spurring discontent. The China Dissent Monitor, a project of US-based Freedom House that collects information on protests, says economic demonstrations have remained elevated since August, with many focused on labour disputes and a real estate crisis that’s cutting into household wealth.

Just a few years ago, Xi Jinping’s economy was on the brink of world domination.Credit: Getty

Thousands of angry retail investors last month flooded the US Embassy’s Weibo page with criticism of the government’s handling of the economy in the midst of a $US7 trillion ($10.8 trillion) stock rout. Elsewhere on the platform some even insinuated that only a change in the top leadership would spur markets — comments that managed to skirt censors before they were eventually taken down.

Compounding the problems is a broad drop in wages among civil servants who have seen bonuses slashed in recent years as indebted local governments struggle to earn enough revenue. That risks disenfranchising the vast bureaucracy charged with implementing Xi’s vision on the ground.

“As long as my income was decent, I didn’t complain,” said Zhou, a mid-level policeman in a southwestern city who asked to be identified by only his surname, adding that cuts have reduced his bonus by 30 per cent from before the pandemic. “But now the economy is in bad shape, the leadership needs to show us some hope.”

While the growing angst doesn’t pose an immediate threat to Xi, who has amassed more power than any Chinese leader since Mao Zedong, broader discontent threatens to exacerbate weakened confidence as consumer prices drop at the fastest pace since the global financial crisis. The domestic strife comes as foreign investors turn away from China, with direct overseas investment in 2023 slumping to a 30-year low.

At the same time, there are fewer checks on Xi’s policymaking. The Chinese leader has upended Communist Party norms since consolidating power and installing a coterie of loyalists in 2022, marking a shift from the more collective decision-making that helped propel China’s economic rise. That is also making Xi more of a target as his push to deleverage the property sector leads to a slowdown that’s starting to impact the wider population.

Despite the challenges, the leadership in Beijing appears broadly confident in its plan to reorient the economy, said Yuen Yuen Ang, a professor of China’s political economy at Johns Hopkins University. The danger for Xi is that the “fallout of the decline of the old growth model might be so great it prevents him from moving into the new growth model,” she added. “The big question is, can you make that change fast enough?”