Money well spent on growth

China must stimulate domestic consumption to drive the economy as its Western export markets shrink

Profound and complicated changes in the world economy have further demonstrated the close relationship between China's economic transformation and the prospects for global economic growth. Consumption-driven economic restructuring will be the determinant of China's sustainable development in the coming one or even two decades, and will greatly influence the rebalancing and recovery of the world economy.

Why is China making domestic consumption the strategy for its economic transformation? Why is increasing residents' consumption rate the government's binding objective? It is because the complicated situation enveloping the world economy will have a significant influence on China's economic transition. On the one hand, conflicts resulting from the European sovereign debt crisis have become more serious, and there are now concerns that the crisis will lead to a European banking crisis. This is a profound and complicated issue that will require more than the short-term policies that Europe is adopting to mitigate the effects of the sovereign debt crisis.