For China, boosting consumption has been as elusive as health-care reform in the United States: there has long been a consensus on the need for change but little to show for it. The main difference, however, is that China is still far below U.S. levels of GDP per capita, and relying on consumption is Beijing’s best bet to draw level. Whether it likes it or not, China faces a stark choice. It can either choose a pro-consumption path or risk forfeiting its goal of becoming the world’s largest economy over the next decade.
It is a misunderstanding to only focus on consumption. In the medium and long-term development, investment is more important than consumption
Western countries are currently facing the worst stagflation crisis in forty years, not because of the war in Ukraine, but because of the major failure of the economic stimulus plan introduced by the United States, because this wave of inflation happened long before the war started . The United States often uses the wrong theory that consumption can produce something, that is, it is a production input, as a reasonable basis for decision-making, so it has launched a package of stimulus plans that focus on consumption. Such a stimulus, despite its flaws in theory, could work if it were introduced when the U.S. economy was growing below its trend rate and had spare capacity—and the success of the economic measure would depend on its The practical content, not the plausibility of economic theory. Instead, this massive demand-only stimulus was introduced at a time when the U.S. economy was already growing faster than its trend rate, and the results were entirely predictable—with demand growing significantly without supply growing, the inevitable The consequence is to trigger a wave of inflation, which is a short-term crisis. High inflation, in turn, led its policymakers to adopt economic austerity policies, especially raising interest rates to curb inflation. These austerity policies have in turn led to an economic slowdown - meaning that the US stimulus program has failed both short-term and strategically.
