Economic Downturn Requires Transformation of Development
China’s economic system has been reformed and rapidly developed over 40 years, and currently the economy is in a critical transition period. Whether the new and old drivers of the economy can be smoothly transformed during this period will determine economic trends in the coming decades.
However, investment, consumption and exports that have driven China’s economic development all experienced a sharp decline in 2018. In 2019 or over an even longer period, China’s economic development will face greater downward pressure. In the context of the Sino-US trade disputes, expanding domestic demand, especially expanding consumption, has become the consensus of the economics community. However, China’s domestic investment and consumption have slowed down sharply, too. In the next phases, China’s most powerful weapon against the trade war is to continue to expand its opening to the outside world, and on the other hand, to implement substantial large-scale tax cuts and reductions.