Most analysts blame the Chinese economic slowdown on the country’s attempt to rebalance its economy away from what has been its main growth driver, manufacturing and exports, to one based on domestic consumption.
To allay fears that Chinese consumers won’t pick up the ball, on Tuesday, Minister of Commerce Gao Hucheng told a news conference consumption in China will grow at a quick pace in 2016.
Last year, consumption accounted for 66.4% of China’s GDP growth, the statistics bureau said in January. While “old economy” sectors such as heavy industry show contraction, recent business surveys show the service sector posting resilient growth.
Gao told the crowd that neither depreciation or appreciation of the yuan would benefit China’s trade. In August China devalued its currency by nearly 2%. Since then, the yuan has fallen an additional 3% against the dollar.
In addition, Gao said the Chinese-led Regional Comprehensive Economic Partnership (RCEP) and the US-led Trans-Pacific Partnership (TPP) are moving in the same direction.
China is not a member of the 12 Pacific-Rim countries which agreed to the TPP trade pact, in October last year.