China should add a quantitative target for consumption growth as part of its long-term modernisation goals to help sustain growth momentum as the country\u2019s population declines, a prominent Chinese economist said.<\/p>\n
\u201cIn addition to setting a gross domestic product growth per capita target through 2035, we should also establish a target for the household final consumption rate \u2013 meaning the share of household consumption in GDP should be increased as well,\u201d said Cai Fang, an academician at the Chinese Academy of Social Sciences.<\/p>\n
Currently, household consumption accounts for about 39 per cent of China\u2019s GDP, Cai said on Tuesday at the International Forum on China\u2019s Economy and Policy in Hong Kong. Over the next decade, he added, it should rise to around 61 per cent as China strives to become<\/a> a \u201cmoderately-developed\u201d country by 2035.While that goal has been broadcast by Beijing for several years \u2013 and was reiterated in the proposal document for the country\u2019s next five-year plan \u2013 an official publication earlier this month provided a clearer definition<\/a> of what would qualify as a success, setting a target of around US$20,000 in per capita GDP.<\/p>\n Given projected increases in productivity, Cai said, China has the potential to reach this benchmark in the next decade, though he added the achievement will depend on demand-side factors, especially consumption.<\/p>\n \u201cThe demand-side constraints we\u2019re facing now are essentially the same type of challenge as the supply-side constraints we had a decade or so ago, and they require a reform-driven spirit to tackle,\u201d Cai said.<\/p>\n