China's consumption boost drives economic recovery

With the concerted efforts of China's policy package to boost consumption, coupled with its rapidly growing innovation capability, the world's second-largest economy is on track for a stable economic recovery this year, said a senior executive on Friday at the "CEO: Grow with China" Roundtable.

"Even though there are certain geopolitical headwinds, we remain very optimistic about China's economic prospects this year as the country's fiscal and monetary policies work hand in hand," said Ole Gerdau, chief operating officer at Deutsche Bank China.

According to him, consumption will be the key driver of the economy, contributing roughly two-thirds of China's growth this year. The trade-in program, which has doubled in funding, is expected to have a very positive impact on consumption.

Consumption is critical to transitioning China from the old model driven by investment and infrastructure to a new economy that will further elevate the country. This trend has already been observed over the past decade, with consumption consistently increasing as a percentage of GDP, he said, citing Deutsche Bank research.

He also noted that the emergence of DeepSeek is changing global perceptions of China's innovation strength and technological advancements.

"This is a wake-up call for the world, signaling that now might be the right time to invest in China. We expect this year to be a turning point, where international investors will shift their focus and increase their allocation to the Chinese market," he said.

It makes global investors realize that the more they understand China's development, the more innovation they will discover, he added.

"We have very little doubt about the long-term prospects of China's economic growth. China is becoming more global, relevant, and integrated. For us at Deutsche Bank, we will grow alongside it," he said.

The event on Friday was organized by the China Daily Institute for Corporate Communication and the China Services Information Platform.