Analysis-China signals sharper pivot to consumption as imbalances worsen

By Kevin Yao

BEIJING (Reuters) -China’s over-reliance on investment and exports to power its $19 trillion economy appears to have reached a limit.

Chinese leaders are signalling a sharper shift towards supporting consumption over the next five years as limited investment room and slowing exports have exposed vulnerabilities, though measures may take time to yield results.

While the goal to expand domestic demand has been a longstanding one, and will not trump high-tech manufacturing as a priority, analysts say the proposals in the 2026-2030 plan are more explicit.

“The suggestion explicitly pledged to raise the consumption share in GDP. The philosophy of consumption policy also seems to have shifted from almost supply-centric to supply-and-demand balanced,” Citi analysts said in a note