China’s economy has steadily grown to become the second-largest in the world. Growth was built in large part due to external demand. China became a manufacturing powerhouse, with foreign economies demanding its goods and services. This made trade a vital component of China’s economic growth. Now, as the global economy evolves and trade tensions heighten, China’s government is focusing on turning its economy into a consumer-driven one.

• China’s Premier, Li Qiang, said he is confident China can transform into a consumption-driven economy. Consumption has been a key focus for the government to help grow the economy domestically and become less reliant on foreign demand. Premier Qiang says this will also make China a stable force for global trade.
• Beijing wants to boost its consumer strength to improve growth on top of its already robust manufacturing sector. This could help it maintain its status as an economic powerhouse in the future. Concern is rising that the economy will need to boost internal demand, with global trade activity shifting.
• Premier Qiang also touted China’s developments in electric vehicles and artificial intelligence.
• Domestic demand has been relatively soft in China in recent years. However, Beijing and China’s central bank have offered stimulus measures to help boost demand. Last month, the People’s Bank of China lowered its policy interest rates.

China appears to be on the cusp of a new trade deal with the US, pending leaders’ approvals. Still, some levies are likely to remain in place. China is concerned about future trade activity and is looking to take steps now to stabilize its economy domestically should further policy actions stunt global trade. All eyes are on China as it works out its trade arrangement with the US, but plans are in place to help grow the economy from the inside and help stabilize trade activity.

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