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China Adviser Urges Boosting Consumption to 70% of GDP by 2035

Mar 25, 2025 - financialpost.com
China is being urged to increase its consumption to 70% of GDP by 2035, up from the current 55%, to align more closely with developed countries. Peng Sen, president of the China Society of Economic Reform, emphasized the need to shift focus from investment-heavy projects to boosting domestic consumption, which has been repressed by the country's rapid industrial growth. This change is seen as essential for rebalancing China's economy amid geopolitical tensions and diminishing returns on investment. The government has prioritized boosting domestic demand, although specific targets have not been set.

Additionally, China has made significant progress in its "Made in China 2025" initiative, achieving 96% of its goals to become a leader in strategic industries like new-energy vehicles and robotics. Despite downplaying the program to avoid international tensions, China continues to invest in advanced manufacturing to drive growth after a property market crash. Research indicates that China has achieved global leadership in several key technologies and is rapidly advancing in others, despite challenges posed by U.S. trade policies and export controls.

Key takeaways:

  • China aims to boost consumption to 70% of GDP by 2035 to align with developed countries.
  • The shift in focus is from heavy investment in projects to investing in people to increase domestic demand.
  • China's "Made in China 2025" initiative has largely succeeded, achieving global leadership in several key technologies.
  • Geopolitical tensions and diminishing returns on investment are driving China's need to adjust its growth model.
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