Consumption is a key driver to boost the future economic growth when China is undergoing the economic restructure, said an expert Wednesday on the sideline of the World Economic Forum.
John A Quelch from China Europe International Business School told Xinhuanet that it's right for China to choose a path by transforming the economy from being export-led to more balanced, consumption-led.
"The question is how quickly the transition will occur," said Quelch, adding that some economists believe that given the lack of a sound healthcare, safety net and pension system, many Chinese will still go on saving for a rainy day, and they will not step up for consumption. "This will be a big question hanging over Chinese transition," he said.
On how to stimulate consumption, Quelch said there are three approaches any government can take. "One is to stimulate spending, such as infrastructure projects."
The second is to reform fiscal and tax regimes, reduce taxation on goods, savings, services, and low-income population in order to give more people more money to spend, he said.
Third, the government should also create a level playing field for SMEs, he noted.
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