According to Bloomberg research, in order to maintain economic growth rate of 6.5%, in 2016 and 2017, China has to invest 3.8 trillion yuan and 4.5 trillion yuan on transport and basic infrastructure respectively.

In other words, in the next two years, China has to invest over 8 trillion yuan on transport and basic infrastructure.

The research team at ANBOUND Consulting suggests that the economists at Bloomberg are overly pessimistic on China's capabilities and resolves in maintaining its short term economic growth. Moreover, the economists at Bloomberg have underestimated the structural economic change in China.

China's economic policy will take into account the need to strike a balance between achieving an appropriate expansion of aggregate demand and giving particular emphasis to structural reform on the supply side.

However, when judging China’s economic prospect, one should not be restricted by investment thinking.

China’s economic structure has been undergoing transformation quietly and if we were to ignore consumption, then we will be ignoring an important future growth driver.

As explained by Chan Kung, ANBOUND’s chief researcher, if you do not understand consumption, then you do not understand China’s economy as well.