China doubling down on consumption as route out of export reliance: ex-PBOC official
Beijing’s policies seen putting income growth above GDP, with investments in social welfare, future tech and advanced manufacturing to spur internal demand
China is pushing consumption to grow faster than overall economic expansion as the nation accelerates a shift to domestic demand-driven growth amid external criticism over trade imbalances, a former deputy governor of the People’s Bank of China said at the World Economic Forum.
“The policy says consumption growth [should be] stronger than GDP growth … [and] income growth will be higher than GDP growth,” Zhu Min said in Davos, Switzerland, explaining that this is the key performance indicator for officials, and that it reflects Beijing’s commitment to rebalancing the economy.
“I think that China realised that you cannot depend on real estate, exports and credit increases,” Zhu added, speaking during a panel discussion on Wednesday. “You have to move to your own solid footing – there is a domestic market.”
Zhu expected that Beijing would increase outlays on education, healthcare, pensions and consumption subsidies while pressing ahead in next-generation fields beyond just artificial intelligence, including quantum computing and nuclear fusion.
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Over the next two decades, China will strive to further upgrade its manufacturing base to produce made-in-China goods that are cheaper, of higher quality and more technologically advanced, according to Zhu.