China Looks Inward for GDP Growth

Faced with falling demand for Chinese exports amid trade friction with the United States and other partners, President Xi Jinping has unveiled a “dual circulation” policy that calls for boosting domestic consumption to create demand for products that are now sold abroad. A new name for the rebalancing toward consumption that China tried and failed to do a decade ago, “dual circulation” faces hurdles as the share of private consumption in China’s GDP remains low, household debt as a share of disposable income is rising, and policies that would raise wages for workers would make Chinese-made goods more expensive and reduce export competitiveness.