China to further unlock consumption potential for economic growth
BEIJING – As consumption continued to be the main engine of China’s economic growth, the country is stepping up efforts to create a favorable environment to further unleash consumption potential.
Consumption contributed 60.5 percent of China’s economic growth in the January-September period, with service consumption accounting for 50.6 percent of the final consumption expenditure of residents.
“Hot areas in service consumption frequently emerge, and the innovation capability of sectors including culture, education, tourism, sports, elderly care and home service sectors is constantly improving,” said Chen Lifen, an official with the Ministry of Commerce (MOC).
A guideline issued by the MOC and other departments earlier this month stressed developing a series of new platforms for international products and service consumption and promoting new formats in cultural sectors, including fashion and creative industries, to unlock the potential of service consumption.
In five years, cities with potential can work to grow into international consumption centers, and become engines to help upgrade the industrial structure and boost economic growth, according to the guideline.
Building megacities into international consumption centers can better meet consumers’ demand for international high-end products, retaining domestic consumption and boosting consumption upgrading, said Wang Wei, director of the market economy research institute of Development Research Center of the State Council.
Massive consumption potential can also be unleashed from consumption backflow as Chinese citizens’ outbound tourism consumption topped the world in 2018 with a spending of $277.3 billion in foreign countries, up 5.2 percent year-on-year, according to the World Tourism Organization.
To win back overseas consumption, the country can leverage the duty-free store policies, and raise the quality of domestic products and services by aligning its own standards with international ones, said Guan Lixin, an official with the MOC.
Retail sales of consumer goods rose 8.2 percent year-on-year in the January-September period. Excluding automobile sales, the growth rate reached 9.1 percent.
Local governments are planning to gradually lift vehicle purchase restrictions and announce measures to promote the consumption of used cars and new energy vehicles, said Zhao Ping, a researcher with the Academy of the China Council for the Promotion of International Trade.
She noted that those policies could effectively ease the negative impact of automobile sales on consumption growth.
It is essential to remove institutional barriers and accelerate innovation in system and mechanism to transform consumption potential into tangible purchasing power, Chen said.