• UGI USER
  • Dec 28, 2023
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CHINA’S 2024 ECONOMIC POLICY: A STRATEGIC OVERVIEW

Why in the News?

Central Economic Work Conference (CEWC) released  China’s 2024 Economic Policy.

Key Highlights:

  • Shifts from export-led to domestic demand-led growth.
  • Emphasizes high-quality production, tech self-reliance, and financial discipline.
  • Focus on “dual circulation” to boost domestic consumption.
  • Emphasis on “prudent monetary policy” and “proactive fiscal policy.”
  • Fiscal sustainability to manage escalating debt burdens.
  • Stabilized liquidity levels, avoiding excessive infusion.
Source: Foreign Policy
What is Dual Circulation?

Dual circulation encompasses boosting internal demand, prioritizing the domestic market, enhancing the nation’s innovation capabilities, lessening reliance on foreign markets, and concurrently maintaining openness to the global economy.

India Vs Chinese Economy :

Investment Ratios:

  • China consistently invests a higher GDP percentage, averaging 40-43%.
  • India’s investment ratio lags, around 33-29%.

Composition of Exports and Imports:

  • India’s FY 2022-23 exports exceed USD 770 billion, imports around USD 890 billion.
  • China’s 2007 exports surpass USD 1.2 trillion, showcasing higher global integration.

Difference in Tariff Rates:

  • China’s declining average tariff rate attracts foreign investments.
  • India’s tariff rate progress hinders global integration.

Labour Force Participation:

  • China maintains a high labour force participation, dropping slightly.
  • India’s estimated labour force participation is lower at around 50%.

Employment Generation:

  • India sees job creation in construction and services.
  • Limited opportunities in formal manufacturing hinder growth.

Participation of Women:

  • China’s female labour force participation declines slightly.
  • India exhibits lower female participation, indicating fewer women in the workforce than China.