MNI China Press Digest Dec 8: Economy, Consumption, Guangdong

Highlights from Chinese press reports on Monday:

• The latest Chief Economist Survey conducted by Yicai showed a December reading of 50.0—equal to the boom-bust threshold and slightly below November’s 50.3. Economists anticipated that November’s year-on-year CPI at 0.72% and PPI at –2.05%. They projected a –2.1% cumulative growth rate for fixed-asset investment, 3.09% year-on-year growth in total retail sales of consumer goods and 5.0% growth in industrial value-added. According to Cai Wei of KPMG, the economy remained in a phase of modest recovery supported by growth-stabilising policies and reduced external uncertainty.
• China’s economic growth challenge has shifted from supply constraints to demand constraints, according to Liu Shijin, former deputy director at the Development Research Center of the State Council. Speaking at the Southern Finance Forum, Liu said that insufficient demand stems from inadequate consumption, not from weak investment or exports. As a result, economic growth will increasingly rely on innovation and consumption. China needs to construct a bridge between manufacturing and consumption to become a powerhouse in both domains. Liu added that a strong currency was an important marker of a strong financial nation. The British pound and the U.S. dollar gained their international standing through strong economic, trade, technological and military foundations, along with sound monetary institutions and developed financial systems, Liu said. In their initial stages, these countries all possessed manufacturing-centered real economies that accounted for a substantial share of global output.
• China’s largest exporting province, Guangdong, is shifting from competing on cost advantages to quality, design and brand strength, according to the 21st Century Herald. The focus of competition is moving beyond functional specifications toward cultural aesthetics and brand value. Official data showed that during the “14th Five-Year Plan” period, Guangdong’s self-brand products accounted for 21.1% of the province’s exports—an increase of 2.6 percentage points from 2020. Wang Haizhong, a professor at Sun Yat-sen University, noted that firms like BYD have established brand showrooms overseas, building sales networks and gradually strengthening their international brand influence. An industry insider cautioned that enterprises should avoid exporting low-quality, low-priced products, stressing that such practices amount to “involution” and would damage the reputation of all Chinese brands.