Journalist from Economic Information Daily learns that in terms of consumption field, China will release demand through expanding medium and high-end product consumption and service consumption and will launch a series of new measures on supply-side end promoting consumption, including conducting a new round of comprehensive reform pilot in tertiary industry, formulating outline for innovative development of service economy, enlarging duty-free consumption to attract consumption backflow and tackling mismatch of supply and demand in consumption field. Industrial insiders predict that consumption is expected to continue to grow by about 10 percent this year. Service consumption, medium and high-end industrial consumption goods and foods will be major drivers for transformation of consumption structure.
Consumption expected to continue to grow by about 10 pct. in 2017
Consumption’s contribution rate to economic growth has jumped significantly for three consecutive years from 50.2 percent in 2014 to 71 percent in the first three quarters of last year, so undoubtedly it has become pillar of China’s economy. National Bureau of Statistics (NBS) will release consumption data for the whole year of 2016 this Friday. Many experts believe that consumption will grow by about 10 percent in 2016 and 2017.
Li Yang, an academician from Chinese Academy of Social Sciences (CASS) and chairman of National Institution for Finance & Development, forecasted that total retail sales of consumer goods will reach 33.1 trillion yuan with a nominal growth of 10 percent and will keep steady development trend on the whole. Regarding structure of domestic demand, contribution rate of final consumption expenditure to growth of gross domestic product (GDP) will be 73 percent in 2016, up by 6.6 percentage points from a year earlier, reaching the highest record since 2001.
Zhao Ping, head of International Trade Research Department of China Council for the Promotion of International Trade, told that 2017 will see stable growth on the whole and economy will still face downward pressure. Factors such as custom, culture and mentality besides income have greater influence on consumption and long-term factors will be decisive factors impacting consumption. Consumption is supposed to continue to surge by about 10 percent this year.
In the opinion of Lian Ping, chief economist with the Bank of Communications, China’s economic growth relies less on external demand but relies more on domestic demand. A great many of policies promoting consumption development gradually take effect and supply-side structural reform advances growth and upgrading of consumption. Information technological development drives consumption intention and consumption confidence to pick up. Increasing commodity price facilitates nominal growth of consumption. Therefore, consumption is expected to see a growth of about 10.2 percent in 2017.
Gao Yuwei, researcher from international financial research institute of Bank of China, also made the same prediction. He said that in terms of consumption structure, as new products, new commercial activities and new models of consumption field are introduced increasingly, communication equipment, Chinese and western medicines, service for the old, online retail are expected to keep rapid growth and become one of the major factors influencing consumption growth. Meanwhile, consumer confidence index, satisfaction index and expectation index all recovered to some extent, which will help boost consumption. But regarding income, resident income growth slows down, weakening its influence on consumption.
Service consumption and medium and high-end consumption become major drivers for consumption upgrading
Industrial insiders pointed out that green consumption, travel and leisure consumption, individualized consumption see booming development since 2016 and new commercial activities of consumption with “Internet Plus” as core feature have completely changed the traditional consumption behaviors and consumption model to become new drivers boosting consumption growth.
The government lowers social security premium rate and payment proportion of provident funds. Besides, a series of flexible holiday arrangement is conducive to stimulate residents’ consumption passion and consumption intention, which makes consumption the most important impetus advancing China’s economic growth and contribution rate of tertiary service to economic growth continues to move up, said Li.
Driven by “Internet Plus”, Internet-based consumption stands out from the rest. Looking into 2017, industrial experts think that service consumption and medium and high-end consumption will become major drivers for consumption upgrading.
In addition, service consumption will be the biggest pillar supporting consumption upgrading. Choosing services related to culture, sports, leisure and tourism can shows every one’s unique lifestyle, which highlights the individuality of consumers easily.
New policies including expanding duty-free consumption under formulation
Service consumption and medium and high-end consumption will gain major supports from policies. It is learnt from Ministry of Commerce that the government will follow the consumption structural upgrading and demand trend, focus on expanding consumption of medium and high-end products and meet the fast-growing emerging service consumption demand.
The government will continue to implement action plan on transformation of 8 major service industries including catering, accommodation, housekeeping, maintenance of household appliance, cosmetology and hairdressing, hair washing and dying, bathing and photography, introduce measures which will push forward housekeeping, catering, community convenience and rural life service, promote e-commerce into community and explore medium and high-end and individualized life service consumption market.
Meanwhile, it will unveil some policies such as encouraging new modes of trade such as cross-border e-commerce, direct selling of import commodity and parallel import of vehicles, unblocking channels for import of consumption goods and enlarging duty-free consumption so as to attract consumption backflow.
Translated by Vanessa Chen
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