China's consumer revival depends on addressing social safety net, says expert

China’s bet on consumers boosting the economy may not pay off if the government fails to address the public’s broad concerns about the social safety net, said former Morgan Stanley chief economist Stephen Roach.

In a Bloomberg TV interview at the Boao Forum for Asia, the economist who once said “Hong Kong is now over" expressed concerns that Beijing’s program is more “slogans” than substantive actions to get momentum going for consumer revival.

He revealed that Chinese households tend to save rather than spend as they are “fearful of an uncertain future” in terms of health care and retirement. 

“They’re fearful of how they can make ends meet when they’re older,” said Roach, who was once known as "China's good friend."

STAFF REPORTER