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China Needs To Boost Domestic Demand To Balance Trade

CHINA PRESS

China must reduce policy interventions and optimise the allocation of resources to boost domestic demand and achieve a more balanced foreign trade relationship, according to Zhang Bin, deputy director at the Institute of World Economics and Politics. China’s high trade surplus comes at the expense of domestic consumption which exacerbates trade disputes and sanctions, Zhang added. China’s real rate of return on overseas capital accumulated from its trade surplus was lower than that on domestic assets, meaning China’s resource allocation was not optimal.

MNI Beijing Bureau | lewis.porylo@marketnews.com

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