Domestic Demand Underpins Economy

A meeting in May held by the Financial Stability and Development Committee under the State Council released a package of policies to stimulate consumption, promote investment and boost domestic demand in order to stabilize China’s economy and restore growth. Expanding domestic demand will become a main economic strategy in the upcoming years at a time when China’s international trade faces growing pressures from trade frictions and the outbreak of Covid-19. The Chinese economy is now more vulnerable to external shocks than during the 1997 Asian financial crisis and the 2008 global financial crisis. Expanding domestic demand, the third time in China, means more proactive fiscal policies and deepening supply-side reform to attain the high-quality development the government wants.