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.”
China “has no choice” but to shift its focus to domestic consumption from an export-dependent model, given a volatile international backdrop, he said, noting that the transformation would rest on two pillars: greater state spending on the population and continued investment in future technologies.
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.
FULL EVENT: Chinese Vice-Premier He Lifeng delivers address at Davos
FULL EVENT: Chinese Vice-Premier He Lifeng delivers address at Davos
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.