China has launched a “double-cycle” policy in the wake of the ongoing trade war between the United States and China, hoping to focus on domestic demand in the economy and supplement it with external development. However, Xu Hongcai, deputy director of the Economic Policy Committee of the China Society for Policy Science, was quoted as saying that the “rebalancing” of the economy from investment-led growth to consumption-led growth will probably slow down in the next five years as the rapid growth of consumption on the mainland has passed. It will only grow slowly in the future.
The government needs to spend more money on infrastructure investment to improve the care of the elderly population and promote urbanization. He noted that consumer spending on the mainland has passed the rapid growth stage, and data show that the growth rate of consumer spending as a percentage of the mainland’s nominal GDP has been slowing since about 2016. He also warned that the continent could face the risk of import Inflation as the global economy strengthens, pushing up commodity prices.
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