China needs consumption surge for full-blown economic recovery, researcher says

A former research official with China’s Communist Party has stressed the importance of consumption and shoring up the service sector in advance of major conclave

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A former researcher with China’s Communist Party has emphasised the importance of consumption for the country’s future economic growth. Photo: EPA-EFE

Published: 9:00pm, 19 Jun 2024Updated: 8:38pm, 20 Jun 2024

The third plenum of the Central Committee of China’s Communist Party, scheduled for next month, is expected to set the tone for the country’s economic policy for the next several years. In advance of that meeting, the Post is reviewing the work of notable scholars and observers about their own expectations – as well as their thoughts on China’s economy at large. The first part of this series can be found here and the third here.

China should increase household incomes and improve its social security system to stimulate consumption, a former Communist Party research official has said, adding that authorities should not hastily impose restrictions on the purchase of big-ticket items like houses and cars.

“The market conditions of products like homes and cars have a greater impact on economic stability,” said Zheng Xinli, former deputy director of the party’s Central Policy Research Office.

He made the remarks in a commentary last month for the Study Times – an organ of the Central Party School, the country’s top ideological training centre for up-and-coming officials.

“We need to improve management of production and sales channels, not impose administrative restrictions hastily, and create a favourable policy environment for sustainable growth of the real estate and automobile industries.”

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The piece was published ahead of the landmark third plenum of the party’s Central Committee, scheduled for July. Expectations are high for economic reform as ebbs in factory output, property purchases and consumer spending are holding back a full-throated post-pandemic recovery for the world’s second-largest economy.