Commentary: Until China changes its growth model, don’t expect any ‘revenge spending’

Commentary: Until China changes its growth model, don’t expect any ‘revenge spending’

Unfortunately, China’s administration has huge recognised the importance of boosting local intake, at least publicly. Over the past two years, successive rulers have talked up the country’s supersize business with a rising middle school estimated at 400 million people and 140 million homes, and rising.

But during the same time, consumption’s communicate of China’s gross domestic product stalled at only above 50 per share, compared to more than 70 per cent in big markets.


There has been much written about why Chinese consumers are hesitant to invest. Their desire to save and lack of adequate social security and care are the primary causes.

There has n’t been much written about China’s leadership’s prioritization of boosting consumption in contrast to exports and investments, the other two primary forces of growth, which have always been the other two priorities.

This has much to do with the group’s ideology and its administration theory.

Mao Zedong promised to transform the People’s Republic into a communist paradise in 1949, but he directed a sizable portion of his resources to encourage industrialization and national defense, opening the door for China to fall into all the business categories under the UN industrial classification, which is commonly believed to be the only nation in the world.

Especially in a time when most people lacked the energy to feed their stomachs, the idea of use or welfare did not appear in the equation.