He said the „untapped potential” of Chinese consumer demand, which grew 7 percent last year, was „the best guarantee of China's economic future.”
„Chinese consumers have had a tough time in recent years,” he said, pointing to slow wage growth, youth unemployment and losses for many in the property and stock markets.
„The key question for the future is to restore Chinese domestic consumer confidence, as this is China's best long-term guarantee and is at the heart of Chinese economic policy.”
Mr Rudd suggested Beijing should look at wage policy, tax policy and welfare provision to rekindle consumer confidence.
Another aspect of China's growth is its private sector, which has driven the country's innovation and job creation. But „Chinese business confidence has taken a hit in recent years” as a result of perceptions that Beijing favors the state-owned sector over the private sector.
Mr Rudd said President Xi Jinping's administration must „put emphasis on ideology and reiterate the key question of normal profit incentives for businesses operating in a market economy” – an implicit criticism of Mr Xi's blatant vilification of Marxism-Leninism.
He also said trade would help boost growth, but a rift in US-China relations could „disintegrate” supply chains and put a handbrake on the Chinese economy.
Mr Xi and US President Joe Biden „hit the pause button on geopolitics” at a meeting in San Francisco last November, but „what we don't know is how long the pause button will be pressed”.
„Will this be a tactical shift in the next 12 months, and then we'll be back to where we were in previous years, where geopolitics will undermine most elements of economic confidence and trade normality? Or will this be a long-term shift?,” he asked.
„I believe it's the latter, but that's the main question on the in-tray of both Joe Biden and Xi Jinping today.”
Speaking at the same panel, London School of Economics professor Keu Jin said trade between the US and China is still at the heart of the global economy, even if some of it is diverted through Vietnam and Mexico.
Responding to Mr Rudd, he said restraints on Chinese consumption, such as wage growth, youth unemployment and losses in the property and stock markets, could keep consumption in check.
But Zhu Min, a former vice-chairman of the International Monetary Fund who is now vice-chairman of the China Center for International Economic Affairs, agreed with Mr Rudd that consumption was reasonably resilient and that it would drive growth.
According to him, other factors supporting the Chinese economy are the digitization of manufacturing and the transition to green energy. But he reckons the growth rate will stabilize at around 4 percent.
Even if China continues to grow at 3 to 4 percent and India expands at a faster rate of four percentage points, the sheer size of the Chinese economy will contribute more than $130 trillion ($197 trillion) to global growth by 2030, Dr Jin said. than India.
Meanwhile, JP Morgan CEO Jamie Dimon told CNBC in Davos that measuring the risk-reward equation in China has become more difficult.
However, he said, „they're trying to make sure they're open for business, they're fair to foreign companies” — a point hinted at earlier in the day by Premier Li Qiang.
„Oddany rozwiązywacz problemów. Przyjazny hipsterom praktykant bekonu. Miłośnik kawy. Nieuleczalny introwertyk. Student.