LONDON, June 2 (Xinhua)– China should continue to boost its consumption, a main engine of its economy which will not only help propel its economy but contribute to the global economic recovery after the COVID-19 pandemic, Jim O’Neill, coiner of the acronym BRIC (Brazil, Russia, India and China) has said.
“It will not only be the growth engine of China’s economy but also benefit the rest of the world in the post-pandemic era,” O’Neill, chair of the London-based think tank Chatham House, told Xinhua via email.
As most economies are hit hard by the COVID-19 pandemic and face narrowing in gross domestic product (GDP) this year, great challenges are also posed to China. 2020 marks a year when China aims to achieve a decisive victory in building a moderately prosperous society in all respects and eliminate poverty.
O’Neil admitted the challenges to target a massive growth to achieve that goal, but noted “it all comes back to the consumer.”
“The Chinese government must ensure its consumers become more confident and more successful,” he said.
According to Ning Jizhe, head of the National Bureau of Statistics, consumption remained the Chinese economy’s top growth driver, with its contribution to GDP expansion standing at 57.8 percent in 2019.
To offset the dampening effect on consumption due to the COVID-19 pandemic, China has introduced sizable scale policies, in which 70 percent of the funds are used to support the increase in people’s income in order to spur consumption and energize the market.
China has been the main driver of the global economy in recent years, especially with its enormous domestic market and scale of consumers, O’Neil said, adding that hopefully China will continue to play that role in the global economic recovery following the coronavirus crisis.
He cautioned that China’s role in the global supply chain might be more complex after the pandemic, but de-coupling will not be a big concern for China if “the Chinese consumers succeed” because “the rest of the world will want to be part of such a future.”
O’Neil has previously said consumers are the main driving force of globalization and Chinese consumers will continue to be the main driving force of globalization in the coming years.
O’Neil also lauded China’s achievement in poverty alleviation, calling it “the most important positive economic success in the world.”
What impressed him most is the country’s rapid urbanization and the rise of the Chinese middle class.
“China probably has at least 350 million people that enjoy the same annual incomes as does the average person in the UK,” he said, adding that it’s remarkable that it happened with such a speed.
“It would be fantastic if many other high populated emerging countries could achieve this success,” he said.