Exhibit 5 shows that China’s consumption share – the solid line – which was already well below that of other major economies in 2000, has fallen steadily over the past decade to about one-third of its GDP.2 Private consumption shares in other emerging Asian economies – the dashed line – are also significantly below those in the advanced economies – the dotted line – and have not moved up in the wake of the global financial crisis.
Measures to boost private consumption would appear to benefit not only the global economy, but also the emerging Asian economies themselves. China and other emerging market economies have already taken some steps to promote household consumption, but the progress on this front has been slow and further measures are warranted.