Structural Changes in China's Import Market for Domestic Demand and Implications

Abstract

In response to changes in internal and external conditions such as the pursuit of sustainable growth and the global recession, China is switching its economic growth strategy to domestic demand-led growth. For this purpose, the country is promoting various plans to boost domestic demand involving heightened urbanization, service sector development, better income distribution, and a broader social security system, and is also working to suppress processing trade, enhance domestic companies’ import-substituting capacity and productivity, and seek industrial upgrading. As a result, imports for processing trade have witnessed a decline, while general trade targeting China’s internal consumption (domestic demand) is rapidly increasing.