Domestic Consumption is Still the Biggest Problem for Chinese Advanced Manufacturing

At China’s inaugural National Advanced Manufacturing Conference (NAMC) that was held last month, Chinese President Xi Jinping asserted that China aims to use advanced manufacturing to “enhance the autonomy and controllability” of China’s industrial ecosystems. There’s no reason to think that China won’t succeed at that goal.

But in trying to achieve that objective, China may in fact only hinder its ability to solve the real problem with its economy: domestic consumer spending. Chinese consumers account for slightly under 40 percent of Chinese GDP, near the bottom in global economic rankings and far below the global average of 60 percent. For comparison’s sake, American consumers account for 68 percent of US GDP, while in the next largest East Asian economy, Japan, domestic consumption rep