Advertisement
China’s economy is turning inward, but will weak domestic demand undermine Xi Jinping’s vision?
- China is shifting its economic strategy to focus more on its huge domestic market as the international environment becomes more challenging
- But analysts say China has a long way to go to boost weak consumer spending and cut its reliance on exports and state-led investment
Reading Time:3 minutes
Why you can trust SCMP
China’s new strategy of domestic demand-led growth in the face of growing international uncertainty will be an uphill battle due to weak demand at home and heavy state intervention, according to analysts.
President Xi Jinping has made it clear that China will rely more on domestic consumption and home-grown technologies as the nation’s rivalry with the United States intensifies.
China’s Politburo, the supreme decision-making body of the ruling Communist Party, decided last week its “dual circulation” strategy – which does not turn away from the international market, but will lean more on domestic consumption – would guide economic policies in the decades to come.
Advertisement
However, China faces numerous obstacles before it can establish a sustainable consumer market and cut its reliance on exports and state-led investment for growth.
01:14
Trump gives Microsoft 45 days to buy TikTok from China’s Bytedance
Trump gives Microsoft 45 days to buy TikTok from China’s Bytedance
Total retail sales, which cover both consumer spending and government purchases, shrank 11.4 per cent in the first half of this year to 17.2 trillion yuan (US$2.4 trillion) because of the coronavirus shock, according to the National Bureau of Statistics (NBS).
Advertisement
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x