In a recent interview, economist Lan Xiaohuan, a professor at the China Europe International Business School, addressed the structural challenges facing the Chinese economy. Lan, known for his best-selling book 'How China Works,' argues that China’s current economic trajectory requires a delicate balancing act to transition toward a more consumption-driven model.

Lan highlights that China’s record trade surplus is a byproduct of its state-led development model, which has historically prioritized production and infrastructure investment. To shift this dynamic, he suggests that the government must prioritize the expansion of the social safety net. By reducing the financial uncertainty faced by households, Lan posits that citizens would be more inclined to increase domestic spending, thereby rebalancing the economy.

Furthermore, the discussion explores the intersection of economic policy and technological advancement. Lan emphasizes that public data infrastructure is a critical asset in the global race for artificial intelligence dominance. He suggests that China’s ability to organize and utilize large-scale data sets provides a strategic advantage in developing AI capabilities, positioning the country to compete effectively with the United States. While the interview outlines these strategic goals, it remains a high-level overview of the economic theories Lan presents in his work, rather than a detailed roadmap for immediate policy implementation.