China’s consumption key to future growth as Trump tariff threat looms, economist says

China’s future growth potential lies in increased consumption and a larger service sector amid the threat of tariffs from Donald Trump, an economist has said.

“China’s industrial development has entered a new phase, shifting from a construction and property-driven model to one powered by consumption and the service sector,” Zhang Yansheng, former secretary general of the National Development and Reform Commission’s academic committee, told the Post on Saturday.

Exports have been one of the country’s main economic bright spots amid sluggish domestic demand and a prolonged property downturn.

Zhang said he believed China would “find every possible way to boost domestic demand” in the face of the US president-elect’s threat to hit the country’s imports with heavy tariffs.

“Not only will this meet China’s own development needs, but it will also expand imports, bringing new momentum to the global economy,” said Zhang, a senior researcher with the Academy of Macroeconomic Research.

China has been ramping up its stimulus efforts in the past couple of months as it tries to hit this year’s economic growth target of around 5 per cent

“The goal of this policy package, which has gained consensus among policymakers, is clear: to boost the economy and ensure it operates within a reasonable growth range,” Zhang said.