Stabilize food prices in China: consumers get more consumption space

Recent inflationary pressures in China have been slowing down, and food price growth has also slowed significantly. The increase in food prices in September fell to 2.5% from 3.4% in August. In response, most economists in the world believe that this trend is conducive to increasing consumption space.

A significant slowdown in China's food prices means that there is more room for consumption growth, which is equivalent to “a large-scale economic stimulus measure,” said Carl Weinberg, chief economist of the High-frequency Economic Information Society of the United States on the 17th.

Weinberger said at an investment forum in Singapore that China’s 1.3 billion people currently spend on average 35% to 45% of their income for food. Their income is growing, and the slowdown in food prices means that people will have more surplus income for consumption after solving food problems, but this effect may not be immediately apparent.

Weinberger said that continuous modernization and urbanization are the driving forces for the sustained development of China's economy. China can maintain double or higher growth in revenue every 10 years for decades.

Ullir Rubini, an American economist known as Dr. Doomsday, believes that China’s economy faces many challenges in the short term, such as local government debt, and consumption growth may not be sufficient to compensate for net exports in the short term. The impact of slowing economic growth, especially at the end of next year, may be greater. However, he also believes that the Chinese economy will complete its transition to a consumer economy with a bright medium- and long-term outlook.

Ma Kaishuo, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, is confident that China's decision makers can meet economic challenges. He said that the consumer's contribution to the Chinese economy is insufficient, but in turn it also means that there is room for growth.

The day's investment forum was hosted by Tianqiao Capital Corporation. Regarding the global economic outlook, some economists at the conference have different opinions. Zhai Chaoming, chief analyst at the Nomura Research Institute in Japan, believes that the biggest problem in the global economy is not government debt, but the private sector needs to reduce debt, so it has to increase savings. .

He said that repairing the balance sheet recession was a problem that Japan had faced since the 1990s. However, almost all advanced Western economies now face similar problems, but the most important concern is not government debt but private economy. He believes that problems will only be solved if the private sector such as households and businesses complete the debt reduction process.