Statistics indicate that consumption contributed 76.2 percent to China’s economic growth, 18.6 percent higher than in 2017, and has been the top growth driver in China for five consecutive years. Experts predict that consumption will further lead the country’s economic growth in 2019.
The National Development and Reform Commission, China’s top economic planner, has approved a plan to boost stable consumption growth on Jan. 29, including 24 measures to spur consumption. Local governments will also roll out a new round of policies to stimulate consumption.
A special meeting will be held this April to better implement consumption-boosting measures, said Wang Bin, a senior official of China’s Ministry of Commerce, at a news conference held by the Ministry on Feb. 12.
The huge Chinese market with a population of 1.4 billion, including nearly 400 million middle-income earners, presents great potential for consumption upgrades, which is the most significant advantage that allows China to maintain stable and long-term development, Wang added.
A rise in the country’s urbanization rate will help boost consumption. Studies suggest that one percentage point of growth in the urbanization rate will lead to about 1.6 percentage point growth in consumption. There is still a huge gap between the 80 percent urbanization rate in developed countries and China’s rate of 58.5 percent, achieved by the end of 2017.
Chinese service consumption will be the primary driver of total consumption. The country’s service consumption has maintained rapid growth and contributed more to overall consumption in recent years, Vice Minister of Commerce Qian Keming said.
He added that services accounted for about 49.5 percent of Chinese consumer spending in 2018.
Experts point out that accelerated integration of online and offline retail, further development of sharing economy, increasingly popular electronic payment, and advanced technologies such as 5G, virtual reality, ultra-high definition display, and artificial intelligence will also help increase total consumption.