Date: December 10, 2024
Event: Supported Webinar
This webinar is part of the webinar series 'Staying in Dialogue with China'. The series will bring you six webinars with distinguished China-based experts, concentrated between April and December 2024.
'Staying in Dialogue with China' is organized and hosted by China Macro Group (CMG), with Caixin Global as Anchor Partner, in cooperation with the China Europe International Business School (CEIBS), Chinaforum Bayern, Swissmem, the Swiss Chinese Chamber of Commerce (SCCC), the Danish-Chinese Business Forum (DCBF), SwissCham China, the Stein am Rhein Symposium (stars), and the Sweden-China Trade Council (SCTC).
In the sixth and last session of the 2024 webinar series "Staying in Dialogue with China", Markus Hermann, Co-Founder and Managing Director, China Macro Group (CMG) will be talking to Prof. Xu Qiyuan, Deputy Director, Institute of Wolrd Economics and Politics (IWEP) at the Chinese Academy of Social Sciences (CASS), about China's "Domestic Demand System" as the sixth structural transition as per CMG's conceptual framework of China's political economy.
The topic of “domestic demand system” refers to China’s attempt to pivot to more consumption-oriented economic growth, while reducing its reliance on fixed asset investments and the trade surplus – a legacy from Beijing’s export-oriented growth model. China should rely more on domestic demand to drive economic growth, thus, in a state of an overall elevated level of marketization, household consumption should shape supply of services and production more strongly.
Against the backdrop of the Covid pandemic, it remained unclear how much policy emphasis would be placed on the building of “domestic demand system”. In China’s short-term policy goals over the past five years, the “demand side” received primary policy focus only once, during the Central Economic Work Conference (CEWC) in 2022, whereas the three preceding years as well as the 2023 CEWC all consistently prioritized the “supply side”, or the goal of achieving the so-called “modernized industrial system” over the “demand side”.
Notably, the new reform plan released during the latest Third Plenum also placed “domestic demand system” at a strategically lower position than the supply side. Nonetheless, it should not be ignored that the State Council published a comprehensive blueprint for “Domestic Demand Expansion Strategy” in December 2022, unifying diverse policy areas ranging from trade, to digital and urbanization into one overarching framework.
The bottom-line is that among the six structural transitions, CMG’s assessment concludes that the “domestic demand system” has seen comparatively least progress compared to the 18th Central Committee’s Third Plenum in 2013, as evidenced by the still very low household consumption as share of GDP of about 40% only.
Key questions CMG want to discuss with Prof. Xu in this coming webinar include:
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