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Time for China to shift economic engines

To Jim O’Neill, China’s economic future comes down to a US$4 trillion question.

That’s how much additional gross domestic product (GDP) the former Goldman Sachs bigwig and economic guru who coined the acronym “BRICs” reckons China would contribute globally by raising its share of consumption-to-GDP to 50%. Today, it’s less than 40%.

This is less about what China can do for humankind than the Covid-19 reality dawning on President Xi Jinping. China’s export engine isn’t what it used to be in a pandemic-wracked world. Though the US is stabilizing, the Delta variant is sending fresh storm clouds its way as Europe and Japan underperform.

China thus must expedite moves to get its consumption engine going. Of course, Xi’s government has been pledging to do just that since 2012. That direction was underscored in last year’s announcement of the “dual circulation” policy, which at its core aims to stimulate more domestic demand.