Chinese Economic System Reform Research Institute Vice President Fan Guang: China's Consumer GDP Ratio Only 40%, Lower Than the US' 80% and India's 65%! Demand Is Severely Insufficient

August 13 morning news, the 2025 Boao Real Estate forum was held from August 12 to 15 in Hainan, China. Fan Guang, vice president of the Chinese Economic System Reform Research Institute and director of the Shenzhen Comprehensive Development Research Institute, delivered a keynote speech titled "Boosting Consumption and Macroeconomic Stability Growth."

Fan Guang pointed out that the long-term problem of China's economy is insufficient consumer demand. When production capacity grows rapidly, the insufficiency of consumer demand becomes even more apparent.

Discussing how to measure the insufficiency of consumer demand, Fan Guang said that the standard is the proportion of consumption in GDP and the relative ratio of consumption and savings. "What percentage does our consumption account for in terms of GDP? If we add government consumption, it's around 65%. If we subtract government consumption, it's around 15%. And if we consider only resident consumption, it's only 40%, which is lower than that of the US (80%) and some developing countries like India (60%-70%). We are severely insufficient in demand."

Fan Guang also mentioned that long-term macroeconomic policies have emphasized supply-side reforms, focusing on improving production capacity. This has been a mindset for many years. However, he believes that it's time to emphasize demand-side reforms.

In his speech, Fan Guang specifically pointed out the importance of social security system reform in promoting consumption. "Social security is an important issue. We cannot do without a social security system in our market economy. It involves issues related to basic poverty and wealth gaps, as well as social stability. A slight change in social security can have a significant impact on consumer demand."