China must focus on human development over infrastructure: population expert
- With return on infrastructure investment falling rapidly, public spending could be prioritised in areas with higher social returns
China must prioritise investing in human development rather than infrastructure to ensure high-quality economic growth under Beijing’s agenda to promote “new productive forces”, according to an expert in Chinese demographics.
“In the stage of high-quality economic development, investing in people yields higher returns than investing in material production,” said He Dan, director of the China Population and Development Research Centre, a think tank affiliated with the National Health Commission.
“Therefore, it is crucial to prioritise investment in people, to support the optimisation of new productive forces resources by a robust social security system.”
The country also faces a prolonged demographic crisis marked by plummeting birth rates and a rapidly ageing population – major obstacles to the already shaky expansion of the world’s second-largest economy, according to economists.
In the article published in the July issue of the commission’s Population and Health magazine, He wrote that the return on infrastructure investment has declined rapidly in recent years, with the investment return rate for local government financing vehicles dropping from 3.1 per cent in 2011 to 1.3 per cent in 2020.