Olga Ponomareva, Expert at the Economic Policy Foundation, commented to Izvestia on the stagnation of retail sales in China and government measures to stimulate domestic demand.
According to the expert, stimulating demand is one of the key objectives of the Chinese leadership for next year. "This requires a range of measures aimed at fostering long-term positive trends. Some are already being implemented, i.e. reforming pension system, stimulating birth rate and developing healthcare system. However, Chinese people need to fully experience the sustainable effects of these measures to adjust consumer behavior patterns, however, this takes time," Olga Ponomareva noted.
The expert also emphasized that recent amendments to the price law prohibiting dumping should further strengthen the market and reverse deflationary trends. "Effective implementation of the law's requirements can limit price competition and the relevant pressure on price growth," she said.
Olga Ponomareva highlighted potential risks for Russian exports with energy resources being a significant portion. "Structural resetting of Chinese industry and gradual elimination of excess capacity in energy-intensive sectors (metallurgy, mechanical engineering) could reduce demand for energy resources. On the other hand, lower oil prices could slow the pace of transition to a low-carbon economy in China, which is positive for Russian suppliers," she said.
The expert noted that new restrictions on aggressive price competition in China could contribute to healthier market conditions overall.