Editorial: Chinese Government Must Define Goal of Expanding Domestic Demand

As Chinese economic growth is clouded by deceleration in exports growth, the importance of the domestic market has once again become apparent. The Politburo suggested at its April 23 meeting that China should accelerate its structural reform while simultaneously expanding domestic demand.

This call from the top decision-making body drew a great deal of market attention and was seen as an important signal. However, the interpretations were different. Three questions need to be clarified to understand this new rhetoric: Why does China need to continue to expand domestic demand? What domestic demand needs to be expanded? And how should it be expanded?

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