China’s post-coronavirus consumer spending ‘not enough’ to drive growth, says prominent economist

Name: China considers mixing Covid-19 vaccine types to boost effectiveness
Uploaded: 2021-04-12T05:39:07.000Z
Duration: 2 min 1 s
Description: China considers mixing Covid-19 vaccine types to boost effectiveness

Yu Yongding, a senior researcher with the Chinese Academy of Social Sciences, says Beijing’s plan for domestic consumption to drive growth could fall short

Household spending is expected to bounce back once the pandemic is over, but the government cannot scale back infrastructure spending in the meantime, Yu says

Reading Time:3 minutes

Why you can trust SCMP

Beijing intends to scale back trillions of yuan worth of stimulus it launched last year. Photo: Xinhua

Frank Tang

Published: 1:39pm, 12 Apr 2021Updated: 4:08pm, 12 Apr 2021

China should accelerate infrastructure investment this year as consumption is not at a high enough level to drive growth, a prominent Chinese economist said on Monday.

Boosting domestic consumption, which has been hard hit by the coronavirus pandemic, is an economic priority in China’s 14th five-year plan for 2021-25 and its 2035 vision.

Household spending is expected to bounce back once the pandemic is over, and China’s gross domestic product (GDP) is projected to rise about 20 per cent year on year in the first quarter of 2021 and more than 8 per cent for the whole year.

But some economists say that relying heavily on consumption to power growth in the immediate term could be risky.

02:01

China considers mixing Covid-19 vaccine types to boost effectiveness

“As consumption is still not enough to become the main driver of economic growth, infrastructure investment should continue to increase,” Yu Yongding, a senior researcher with the Chinese Academy of Social Sciences, wrote in an article published by the China Daily.