June 11 — Nomura China chief economist Lu Ting said in Beijing that boosting consumption over the medium-to-long term requires institutional reforms, notably an improved social security system. He estimated strengthening social security could reduce precautionary saving among about 300 million flexible workers and thereby lift consumption. Lu called social security reform a necessary step for China’s move toward a middle-developed economy and said the next few years are a key window for reform.

June 11 — Nomura China chief economist Lu Ting said in Beijing that boosting consumption over the medium-to-long term requires institutional reforms, notably an improved social security system. He estimated strengthening social security could reduce precautionary saving among about 300 million flexible workers and thereby lift consumption. Lu called social security reform a necessary step for China’s move toward a middle-developed economy and said the next few years are a key window for reform. He recommended central fiscal spending be shifted sharply toward social security, basic healthcare, inclusive elderly care and broad-based consumption subsidies, arguing direct central cash injections to help households repair balance sheets and ease education, healthcare and retirement burdens are needed to reverse high precautionary saving and restore sustainable domestic consumption growth.