Shalid Hussain

China’s latest policy initiatives to boost domestic consumption come at a critical juncture for both its own economy and the global financial system. As the world grapples with sluggish demand, supply chain vulnerabilities and rising geopolitical uncertainties, Beijing’s efforts to stimulate spending are not only necessary but could serve as a stabilizing force in a volatile global landscape. A shift toward consumer-driven growth represents a decisive move away from an overreliance on exports and state-led investments, which, while instrumental in China’s meteoric rise, are now showing signs of diminishing returns. This transition is not just about recalibrating domestic demand — it has profound implications for global trade, multinational corporations and commodity-exporting nations.

For decades, China’s economic success has been underpinned by its investment-heavy growth model. Massive infrastructure projects, industrial expansion and export-driven manufacturing fueled an unprecedented rise, lifting hundreds of millions out of poverty and transforming China into the world’s second-largest economy. The latest set of consumption-boosting policies reflects a keen understanding that sustainable long-term growth will require stronger domestic demand, higher household incomes and a more diversified supply side catering to an evolving consumer base.

The new policies target both supply and demand. On the demand side, they aim to strengthen income growth, reduce financial burdens on households and........

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