(Yicai) Nov. 7 -- Global leaders discussed how China’s vast market potential could be turned into a new engine of global economic growth through policy coordination, upgraded consumption, and the transformation of the service sector driven by artificial intelligence at a sub-forum of the 8th Hongqiao International Economic Forum.

Hosted by China’s commerce ministry and organized by Yicai Media Group, the sub-forum “Revitalizing Consumption: Global Sharing of China’s Market Opportunities” brought renowned academics and executives from companies such as Intel Corporation and JD.Com to Shanghai yesterday.

China’s central government has been paving the way for more high-quality consumption. Late last month, it revealed a policy document that called for efforts to boost consumption by expanding the supply of high-quality goods and services, developing more international consumption centers, and strengthening consumer rights protection, setting the policy tone for the sub-forum’s discussions.

During the keynote session, Liu Yuanchun, president of Shanghai University of Finance and Economics, proposed a package of measures to expand consumer spending. In the short term, he said the focus should be on restoring consumption by improving income, assets, and confidence.

Liu added that policymakers should balance counter-cyclical adjustments with medium-term structural reforms, promote durable goods and new forms of consumption, and strengthen the social safety net through income distribution reform, with all policies tailored to China’s realities.

AI-Enabled Growth

Michael Spence, Nobel laureate in economics in 2001 and emeritus of Stanford Graduate School of Business, said China’s economy would reach a higher income level and a more balanced demand structure in five years.

“The challenge for the policy makers is to try to find bridging policies that bridge the economy through on the demand side, so that this transition from investment to domestic services and household consumption can take place,” Spence said.

Spence added that the development of AI would bring wide-ranging benefits. “The service industry will not only expand but perform better,” he said, adding that similar transformations are likely across various fields. “It won’t be exactly the same story everywhere, but you can see it in legal services, customer service, and innovative retail models, where AI creates entirely new ways of taking advantage of those services.”

He also noted that the transformation will be far-reaching. “We don’t have a complete picture, but we’ve got enough hints about the direction. That I think it’s pretty clear. It’ll be a long-term, transformative period. And it certainly will help build the service side of the economy and accelerate the transition,” Spence said.

How to encourage spending? “To me, restoring momentum means restoring confidence in both the household sector and the private sector investment side,” Spence said. “It involves some bridging measures to make clear they’re going in the right way. It involves clarity of communication about the relative roles of the public, private, and state-owned enterprise sectors.”

Policy Calibration

Lu Ming, professor at Shanghai Jiao Tong University, said that under the 15th Five-Year Plan, China should focus on structural adjustments by making consumption a new growth space and emphasizing service consumption.

Lu suggested stabilizing the economy and incomes, optimizing holidays and working hours, improving urban layouts, enriching service consumption scenarios, and easing restrictive policies to unleash consumer potential.

Sarah Kemp, vice president of Intel, highlighted the role of technology in driving consumption growth, noting that AI-enabled personal computers could spark a new wave of device upgrades over the next decade. The transition from passive tools to active productivity partners, she said, will reshape product value and become a major engine of consumer demand.

During a roundtable discussion, participants, including Shen Jianguang, chief economist at JD.com; Sandeep Seth, chief growth officer from Tapestry International; and Jeff Jia, president of automotive company Lincoln China, exchanged views on the evolving features of China’s consumer market, technology-driven supply-demand models, and emerging business opportunities in the coming five years.

Yang Yudong, editor-in-chief of Yicai Media Group, said that amid the restructuring of the global economic landscape, China’s vast market and institutional opening-up are injecting certainty into the world economy.

“How to turn China’s consumption potential into shared global opportunities and make ‘Chinese consumption’ a stabilizer and accelerator for global growth is a key question for the next five years,” Yang concluded.

Editor: Emmi Laine