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A top advisor to China's central bank has warned that the country's shift toward consumption-driven growth remains a long-term challenge. In comments to Bloomberg, the advisor highlighted structural weaknesses in domestic demand, including weak consumer confidence and uneven recovery across sectors. The remarks come amid ongoing efforts by Beijing to reduce reliance on investment and exports, but the advisor emphasized that policy adjustments will need to balance stability with structural reforms. The outlook has significant implications for global markets, as China's economic trajectory influences commodity demand, trade flows, and investor sentiment. A prolonged transition could delay the expected boost to consumer spending and services, which are critical for sustainable growth. Traders should monitor upcoming data on retail sales, manufacturing PMI, and central bank policy statements for clues on the pace of this transition. For Gulf investors, the delayed consumption pivot raises questions about the timing of opportunities in China's services sector and consumer markets. The advisor's comments suggest policymakers may prioritize short-term stability over aggressive reforms, which could limit volatility in the yuan and regional trade corridors. Key indicators to watch include China's Q3 GDP report and potential stimulus measures in the coming months.
