Topic Reading-Vol.3137-11/12/2020

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Topic Reading-Vol.3137-11/12/2020

英語で世界を知ろう！Topic Reading

2020/11/12 Topic Reading-Vol.3137-11/12/2020

Dear MEL Topic Readers,

Xi emphasizes crucial role of consumption

Any country has challenges and advantages in the economy.

China’s challenge is the high dependency on investment, about 20% higher than other developed countries. Also, a large part of the investment is made by the government, state enterprises, and government-subsidized businesses, a considerable part of which doesn’t seem to be managed so efficiently. China’s advantage is the population of 1.4 billion, the largest in the world, and its growing middle-class population. They have huge buying desire and power, from electric cars to a second or third apartment for investment. However, China’s household consumption accounted for still about 40% of GDP, much lower than the global average level. Also, their urbanization is around 60%, much lower than that of developed countries.

So, if China manages to grow lower-middle income class and increase urbanization, it can boost its domestic economy quite healthily by consumer buying power. This year, the ruling party of China came up with a new mid-term economic concept, called “Dual Circulation.” It aims to expand the domestic market and foster a new development pattern so that all links including production, distribution, logistics, and consumption can rely more on the domestic market to sustain a positive growth cycle. They are also expecting that the growth potential of the already-huge market will attract foreign investment. In short, the dual circulation concept aims to take the domestic market as the mainstay while the domestic and international markets complement each other. It sounds like a grand plan to transform the present challenges into future opportunities.

Enjoy reading the article and learn about China’s new challenge for the next five years.

http://www.chinadaily.com.cn/a/202011/06/WS5fa48625a31024ad0ba836b5.html

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