China needs a consumer revolution to hit growth goal

China’s National People’s Congress extravaganza was a good news-bad news affair for global investors.

Good, in that Xi Jinping’s Communist Party reassured the economics world that China plans to get very micro to fix its macro challenges. Bad, in that Xi’s team really needs to deliver on its policy pledges, lest China loses even more credibility with global investors.

On the upside, the NPC prioritized reinvigorating private businesses, leveling playing fields and shrinking the role of state enterprises for growth and jobs. It also vowed to move past the regulatory crackdowns, including on tech, that previously sent investors for the exits.

Team Xi sent a “message to entrepreneurs, but also to local governments and regulators, that the private sector’s important and it’s necessary,” says economist Neil Thomas at the Asia Society Policy Institute.

More upbeat news came on Friday when finance, commerce, central bank and other officials announced they plan to hold a March 17 press conference to outline measures to boost consumption, a signal that sent the CSI 300 Index to its highest level so far this year.

That’s the micro. On the macro, Xi’s government has often proved more skilled at talking the talk than walking the walk on the type of structural reforms many investors crave. Too often, Xi’s reform team has overpromised and underdelivered.

Premier Li Qiang detailed the government’s new policy priorities in the party’s annual work report. Li said the latest NPC “underscores our resolve to meet difficulties head-on and strive hard to deliver.”

Those difficulties include Donald Trump’s escalating trade war, which is imperiling China’s ability to export its way to 5% GDP growth, the NPC’s stated target for 2025. So far,