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Early Monday morning in Asia, Bloomberg quotes China’s Government Researcher Xu Hongcai to convey a slower shift investment-led growth to consumption in the coming five years. An aging population and a shrinking workforce are cited as the key reasons behind the conclusion.

Xu Hongcai is Deputy Director of the China Association of Policy Science’s economic policy committee, a think tank under the policy research office of the Communist Party’s Central Committee. His analysis suggests, “The share of consumption in the gross domestic product is likely to rise at a slower pace compared with previous years.”

Additional comments

“Consumption has already passed the phase of rapid increase and will only rise slowly in the future,” Xu said in an interview.

“Economic growth still needs the support of investment.”

“The government will need to guide more funds into investing in infrastructure and facilities that enhance elderly care and promote urbanization,” he said.

“Xu also warned China may face the risk of imported inflation as a stronger global economy  pushes up  commodity prices.”

FX implications

The news should weigh on the sentiment of the market and is considered negative for Antipodeans. That said, AUD/USD and NZD/USD print mild losses by the press time amid risk-off mood.

Read:  AUD/USD drops towards 0.7600 amid risk-off mood, US dollar strength