Household income growth holds key to Chinese consumption hopes: ex-official

China should make greater efforts to boost household income over the next five years as the world’s second-largest economy looks to consumption to power future growth, a former senior official said.

Yang Weimin, a former deputy head of the Office of the Central Leading Group on Financial and Economic Affairs, made the comments ahead of next month’s fourth plenum of the Communist Party’s Central Committee.

Committee members will discuss the country’s next five-year plan, with the economic blueprint likely to emphasise income and gross domestic product growth, the upgrading of industry and technological innovation.

“Where will the growth momentum come from over the next five years? It lies in shared development, the pursuit of common prosperity, and gradually narrowing the [income] gap,” Yang said at Tsinghua University in Beijing on Wednesday.

“The main reason for weak consumer demand in China is fundamentally a matter of income.”

Yang, who helped draft multiple five-year plans while working as head of the National Development and Reform Commission’s planning department before joining the leading group in 2011, specifically mentioned the need to raise the share of household disposable income in national income and boost consumer spending’s share of total demand.

South China Morning Post