Ambitious social security and health care reforms aim to coax the masses into saving less and consuming more
This could be big. Saving preference is inversely proportional to consumption preference. Saving reduces consumption spending, that is, demand. Low consumption to investment and low domestic to external are a major factors holding the Chinese economy back from expansion.
Even the IMF is recommending a version of this — from the neoliberal perspective, of course. But China has its own plan in the works. Hopefully, it will be more welfare-oriented than stimulative-directed.
Well targeted, that is, welfare-oriented, this kind of program would also be a factor in stabilizing China's population and reversing the present decline that will adversely affect growth over time absent offsetting increases in productivity — which is one factor in China's emphasis on innovation.
This would also make China more self-sufficient, and it is likely that China is observing Russia's demonstrated success in achieving this.
Asia Times
If China is to take the lead in destroying the planet, more consumption is the way to do it.
ReplyDelete