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EXPORT-LED growth will be limited in scope for China in the coming years. Instead, dual circulation – which balances domestic consumption with international trade – is the “right direction”, said Deputy Prime Minister Heng Swee Keat at a conference on Friday (Oct 18).

This will, however, take time to be fully implemented as it involves many aspects of the Chinese economy and society, such as the Asian mindset of saving.

Heng, who was speaking at the opening of the FutureChina Global Forum held at Marina Bay Sands, noted that the recent measures announced by the People’s Bank of China that were aimed at stabilising growth are “timely”.

Among the measures unveiled by the central bank last month were a cut to banks’ reserve requirement ratio and outstanding mortgage rates for individual borrowers, as well as liquidity support for the stock market through a swap facility.

In the longer term, China also has to manage rising income and wealth inequality, and trade and technological contestation, said Heng.

As a result, it needs continued structural reforms to overcome the limitations of its previous growth models, and transition to more inclusive and sustainable growth.

Heng highlighted that many of these reforms are already under way, including reshaping the education system to emphasise not just college degree but also vocational skills, as well as developing new industrial sectors in areas such as solar energy and electric vehicles.

“While China’s economy is going through a difficult patch, I trust that China will embark on difficult changes and retain its growth path to generate enough resources to deal with the many challenges it is already facing and will face in the coming years,” he said.

Beyond that, he also highlighted that countries in Asia can and should continue to work together, to realise the region’s growth potential, while enhancing linkages with the global community.

To do so, countries must build the “hard infrastructure” and improve connectivity.

Second, they must develop the “soft infrastructure” and nurture talent through education and training. And third, they must continue to pursue regional economic integration and deepen cooperation.

For instance, discussions to upgrade the Asean-China Free Trade Area are near completion, while the Asean Digital Economy Framework Agreement is slated to be completed next year.

This was the 15th edition of the FutureChina Global Forum, which saw more than 700 attendees including government officials, academics and business leaders.

The day-long event will feature sessions on issues such as regional economic cooperation, geopolitical developments, China’s policies, as well as the impact of artificial intelligence on new business opportunities in Asia and the region.

Among the speakers are American investor Ray Dalio, Luckin Coffee’s chairman and co-founder Guo Jinyi, and former Indonesian trade minister Gita Wirjawan.