China needs to devise more policies to boost consumption among the nation’s 1.3 billion people to counter the impact of falling exports on economic growth, central bank Governor Zhou Xiaochuan said.
“Although the government has pledged to boost consumption to sustain growth, we still face difficulties in identifying which areas and which measures we should take to spur spending,” Zhou told a conference in Beijing today. Economic policies have failed to rebalance growth away from trade and investment, with the share of consumption in gross domestic product falling to less than 50 percent from 60 percent a decade ago, he said.
China's income per capita is about $5,500. How can you expect the government to expand consumption when the Chinese are making little or no money in the first place? China was booming because the industrialized world was booming. Now they have to show what they can do it by themselves. And with $5,500 a year per person I think they cannot do much. They are in a hole like the rest of the world. Probably a deeper one. Is the Chinese bubble imploding?
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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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