It should be seen that the root cause of the current weak domestic demand lies in the low spending power of families caused by the high unemployment rate and high housing prices. Although China has arguably the largest middle-income group in the world, most of its wealth exists in the form of the real estate bubble that may burst under the pressure it is under.
Under the current policy of "dual circulation," domestic demand must increase in order to reduce dependence on exports to avoid the middle-income trap. But the Chinese are savers historically. Reversing that trend is likely going to involve a gradual process.
ECNS (Chinese official English news service)
Time to address the root cause of weak demand
Mo Honge, China Daily
Spend it or lose it was Marx's advice with regard to labour vouchers. Perhaps munnie needs to lose its immortality.
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