Economist Liu Yuanchun Warns Overemphasis on Short-Term Balance Weakens Cycle Resilience

TREE NEWS reports: Liu Yuanchun, president of Shanghai University of Finance and Economics, said on Sept. 19 at the Tsinghua PBCSF Chief Economists Forum that expanding domestic demand is a long-term strategy, not a short-term policy choice. He said weak consumption driven by structural rather than cyclical factors cannot be fundamentally fixed by fiscal or monetary easing alone. During China’s transition from investment-and-export-led growth to innovation-driven growth, supply-demand imbalances should be normal, but over-pursuing short-term balance would cost the ability to ride out cycles.