MNI BRIEF: China To Address Consumption In Next Five-year Plan

China’s macroeconomic policy will shift focus to expand consumption from investment in Beijing's next five-year plan (2026-2030) to increase residents' disposable income and improve the proportion of private spending within GDP, said Yang Weimin, deputy director at the Chinese People’s Political Consultative Conference (CPPCC)’s Economic Affairs Committee, on Friday at the 2024 Bund Summit in Shanghai.

Authorities should implement more proactive policies to reduce taxes and fees as well as interest rate burdens on residents, said Yang, who has helped draft five-year plans since 1998, adding the disposable income of residents in 2022 was only 44% of the per capita GDP, a decrease of three percentage points on average over the past twenty years. (See MNI: China's 3rd Plenum To Target Real Estate; Rural Reform Eyed)

Authorities continue to depend on investment to fill the demand gap, which has led to long-term overcapacity, so the future policy stance must change, Yang noted, pointing out urbanisation will accelerate and the country will implement measures such as providing basic public service to permanent rural residents without household registration, especially in megacities. In addition, the private sector must be strengthened to expand employment, he added.