January 29 2024

Growth of Chinese domestic demand provides opportunities

An expanding middle class in China and domestic demand growth could provide business opportunities for European companies, an economist at Barcelona University told Xinhua on Monday.

"If we're wary of customs duties and the difficulties of growing through exports, one option is to produce and sell in China, especially as we can expect an increase in domestic demand in China, but to do that we need to generate confidence in our products among the Chinese," associate professor of economics Sergi Basco said.

Meanwhile, Basco emphasized that if China boosts confidence abroad, it will lead to a rise in external demand. This will not only benefit Chinese companies but also European consumers, he said.

"It's in everyone's interest, including Europeans, to have access to cheap products that are also high quality, for example, electric cars of good quality that are also well priced," he said.

Commenting on recent data showing that China's economy outperformed forecasts and grew by 5.2 percent in 2023, the professor said that "what's really important is to ensure that economic growth is stable in the next five to ten years."

According to Basco, generating confidence among Chinese consumers is a top priority. "Once they start consuming more and there's more internal demand, then foreign companies will see that market and go there."

"It's not about European companies going to China to generate demand, but rather once they see there is demand then they go there," added the professor.