Restoring confidence and stabilising the property market are “significantly more important” for China than the ramifications of tariffs, a Nobel laureate in economics said while warning of financial risks to Chinese households.
While acknowledging that Beijing needs to “seriously” address tariff frictions, the 82-year-old Canadian-American said such external factors were of “secondary importance with respect to restoring momentum in the Chinese economy”.
“Stabilisation of the real estate sector, the financial sector that’s related to it, [and] restoring confidence and momentum are significantly more important than whatever impacts the tariffs are having,” said Spence, who is also a Philip H. Knight professor and dean emeritus at Stanford University’s Graduate School of Business.
During the forum – a high-level dialogue platform that runs alongside the China International Import Expo to discuss and promote global economic cooperation, trade and investment liberalisation – Spence also stressed the need for China to avoid “damage to household balance sheets”, which have been eroded in part by falling property values.
I believe the overall direction of our current consumption policies is sound
