CNBC AI News, July 5th – At the recent 2025 Global Finance Forum in Beijing, themed “Towards a Chinese and Global Economy in the Intelligent Digital Era,” prominent economist Li Daokui, Dean of Tsinghua University’s China Institute for Economic Research, delivered a keynote address with insights that touched upon the evolving automotive landscape and national debt strategy.
Li Daokui highlighted a crucial bottleneck in the burgeoning electric vehicle (EV) sector, pointing to companies like Xiaomi Auto where demand significantly outstrips production capacity. “Some electric vehicle companies, like Xiaomi Auto, have insufficient production capacity,” Li stated. “They sell 200,000 vehicles in just three minutes, yet their production capacity is only in the low hundreds of thousands. Consumers face waiting times of 30 to 50 weeks to receive their vehicles. Therefore, Xiaomi Auto needs to expand.”
He contrasted this with the situation of many other automakers, who he noted possess substantial idle production lines, each capable of producing 150,000 vehicles annually. However, these underutilized assets remain stagnant due to a lack of proactive exit strategies by the companies themselves, hindering efficient resource reallocation.
To address this imbalance and foster industrial dynamism, Li proposed a novel government intervention. “I suggest the government offer a subsidy of RMB 100 million per production line for companies that voluntarily exit,” he recommended. “With Xiaomi Auto contributing an additional RMB 100 million, this would facilitate an effective exchange of old and new production capacity, thereby supporting the smooth functioning of the macroeconomy.”
In a related fiscal proposal, Li also argued for a more robust approach to national debt management. “China’s national debt issuance is currently insufficient,” he asserted. “I recommend issuing national debt equivalent to 40%-50% of GDP, using these funds to replace local government debt. This would allow the government to focus more effectively on providing public services.”
Li Daokui is a distinguished figure in economics, holding a doctorate and serving as the Chafran Professor of Economics at Tsinghua University. He is also a professor at Tsinghua’s School of Social Sciences, the founding Dean of Tsinghua University’s Schwarzman College, and a recipient of the State Council’s special government allowance.
Li’s commentary often sparks considerable public discourse. Previously, his suggestions, such as allocating trillions of yuan to stimulate consumption through a 25% discount for citizens using their national ID, have drawn widespread attention. He reasoned that increased consumption would, in turn, boost corporate production and subsequently tax revenues.
Furthermore, his remarks on the younger generation’s ability with social security pensions have also trended on social media platforms, igniting robust public debate.
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