China urged to look to low-income groups like migrant workers to ignite new growth engines

Central bank adviser Liu Shijin and former Chongqing mayor Huang Qifan call to boost spending power of people down the economic ladder

Proposals include further relaxing urban permit system for better access to public services, and buying up surplus flats for affordable housing

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Officials say bigger efforts are needed to promote equality among China’s rural and urban residents in terms of access to social welfare and public services. Photo: AP

Published: 5:00pm, 3 Dec 2023Updated: 9:25am, 4 Dec 2023

Boosting the spending power of low-income groups could unleash new growth potential for China, a central bank adviser and the former mayor of a major industrial hub have said.

The comments come as the world’s second-largest economy tries to find sustainable growth engines amid a faltering post-pandemic recovery.

Liu Shijin, a member of the People’s Bank of China’s monetary policy committee, said China would be able to hit its target of “around 5 per cent” growth this year.

However, certain structural reforms could help the country discover its full growth potential, Liu told a financial forum in Beijing on Saturday, according to state-backed digital media The Paper.

Concerns have been mounting in China over the economy’s long-term potential amid a prolonged property market slump and local government debt crisis, alongside a drop in exports.

This has seen Beijing double down on its “dual-circulation” strategy, involving greater reliance on the internal cycle of production, distribution and consumption, supported by economic innovation and upgrades.

Advisers like Liu have long urged the central government to relax urban residency restrictions to boost the spending power of migrant workers, the millions of rural economic migrants who helped power China’s rapid urbanisation.