Perspectives with Wenchi Yu Ep. 22 Beyond Geopolitics: China's Domestic-First Economic Policy with Kelvin Lam
Sep 15, 2025
Kelvin Lam, a UK-based macroeconomist and seasoned China observer, shares his insights on the current state of China's economy. He examines critical challenges in the property sector and the transition to a high-tech economy. The conversation delves into strategies for boosting domestic consumption and tackling inequality. Lam discusses the role of automation in a shifting labor market and the implications of the upcoming 15th Five-Year Plan, which aims to foster self-sufficiency and adapt policies amidst geopolitical pressures.
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Pivot To Domestic Consumption
- Expand domestic demand by increasing consumption to replace lost property-driven growth.
- Focus policy on unleashing household savings and boosting services consumption.
Rural Savings Could Unlock Consumption
- Hukou barriers and rural under-consumption hide large household savings pools that could drive consumption.
- Releasing rural income and removing institutional frictions would raise spending sustainably.
High-Tech Push To Avoid Middle-Income Trap
- China deliberately targets high-tech manufacturing to climb the value chain and avoid the middle-income trap.
- Policies like Made in China 2025 aim to increase per-unit value and productivity.