Caixin Summit: China Needs a Strong Economy to Spur Innovation-Driven Productivity, Ex-Policy Adviser Says

China must create a favorable macroeconomic environment to boost the development of its “new quality productive forces,” said a former policy adviser.

Speaking at the 16th Caixin Summit Thursday, Liu Shijin, a former deputy director of the Development Research Center of the State Council, described the country’s economic environment using two metrics: height and width. He said economic height is the growth potential unlocked by innovations and reforms, while economic width is the aggregate demand from people with different levels of incomes.

“Height determines the upper limit of economic growth, while width determines actual economic growth,” Liu said. “The potential for new quality productive forces is huge, but if the current problem of insufficient consumer demand is not resolved, their development will be severely restricted.”