From Industrial Production to Domestic Demand: Can China’s Leader Alter His Long-Held Beliefs?

Beijing is implementing new economic policies to combat the property market downturn, indicating a shift in its priorities. The central bank is providing low-interest loans to local governments to purchase unsold homes. This move by top officials signals a departure from the traditional focus on industrial production as the primary method of stimulating economic growth and instead emphasizes the importance of boosting domestic demand.

However, doubts remain among investors regarding President Xi Jinping’s stance on real estate and consumption. Despite his previous strict enforcement of anti-speculation measures, including the famous slogan “housing is to be lived in, not speculated on,” there are signs of a potential change in mindset. Xi’s upbringing during a time when industrial production was paramount in China’s development raises questions about his ability to shift deeply ingrained beliefs.

The question remains whether a person can truly alter their long-held worldviews shaped during their formative years. Xi’s potential pivot towards supporting domestic consumption over industrial production suggests a willingness to adapt to changing economic circumstances. As China continues to navigate economic challenges, the effectiveness of these policy shifts remains uncertain.