Chinese economists call for wider social safety net to nurture consumption
With trade becoming a less reliable source of growth, Chinese academics have recommended demand-side measures to spur domestic spending
As a growing trade surplus highlights the need for China to boost its domestic demand, scholars at a Peking University seminar suggested enhancing the country’s social safety net and increasing investment in public service to build a foundation for higher consumption.
To address the imbalance in trade, “the ultimate solution is to boost domestic demand and consumption,” said Lu Feng, a professor of economics at the university’s National School of Development, during the Sunday seminar.
“By doing so, a significant portion of domestically produced goods can be consumed within the country, which would also enable a higher volume of imports.”
Lu pointed out that China must realign the structure of its public resource allocation, which has historically been heavily skewed towards the supply side.
There should be a greater emphasis on supporting livelihoods, he said, with particular attention to low-income groups.