(Bloomberg) -- China’s powerful planning body added to calls for the government to bolster domestic demand in an article published a week after Donald Trump’s reelection, underscoring Beijing’s focus on strengthening the economy with the threat of US tariffs looming.
“In the coming period, the domestic market in China will more clearly dominate the economy cycle,” according to the commentary published Monday in the Economic Daily by the National Development and Reform Commission.
Expanding domestic demand “is not only a strategic need for China’s own development, but also helps with resolving the impact of external shocks and the decline in external demand,” said the government agency in charge of macroeconomic policy planning.
The declaration — which didn’t name Trump — suggests Beijing’s increasing caution over a slowing global economy, combined with the uncertainty of a second term for the president-elect. During the campaign, Trump threatened to slap a 60% flat fee on Chinese goods, on top of a universal 10% tariff on everything the US imports, a move that would significantly damage trade between the world’s biggest economies.
Even before Trump’s win, there have been doubts about China’s ability to hit its 5% growth target, despite multiple rounds of stimulus measures.
China this year has been relying heavily on exports to help it reach its economic goals, as domestic consumption remains sluggish amid threats of deflation and a lingering real estate crisis. That effort, however, has generated pushback from developed economies like the US and European Union, as well as emerging markets such as Brazil.
“We believe that the policy package to boost domestic demand will be stepped up next year,” CNCB Hong Kong Investment Ltd. analysts including Liu Boyang wrote in a note Monday following last week’s stimulus announcement.
The NDRC article described technological self-reliance as critical to bolstering the economy and called for a concerted effort to break through technological chokepoints and improve supply chain resilience.
“Only by having the ability and the strength to adapt to new situations, nurture new opportunities and explore new cases can we enhance our ability to survive, compete, develop and sustain amid all kinds of foreseeable and unforeseeable storms and turbulent waves,” the article said.
--With assistance from Fran Wang.
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