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Opinion
China knows how to produce. The next test is whether it can consume
After a decade of boosting productivity, China’s Politburo has sent its clearest signal yet that it is focusing on consumption
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Dr Ken Ip is an assistant professor specialising in business innovation and entrepreneurship at Saint Francis University, Hong Kong.
For the better part of the last decade, China’s economic narrative has been defined by one central doctrine: “supply-side reform”. Since President Xi Jinping introduced the concept in 2015, Beijing has been laser-focused on boosting productivity, eliminating excess capacity and cultivating new technologies.
The results have been striking. China now leads the world in the production of electric vehicles and solar energy, and has made significant strides in artificial intelligence, particularly in patents and research publications. Yet as the global and domestic landscape evolves, the time has come for a new pivot – one that prioritises the other half of the equation: demand.
Last month, the Communist Party’s Politburo signalled a potential turning point. In a rare shift in rhetoric, policymakers emphasised the “four stabilities” – stabilising employment, enterprises, markets and expectations – while acknowledging the need to boost household income and consumption. It’s the clearest sign yet that “demand-side reform” is moving from the periphery of China’s policy toolkit to centre stage.
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