Amid signs of economic slowdown and evolving global dynamics, the Chinese mainland is actively shifting its growth model from export-driven and investment-heavy strategies to one that emphasizes high-quality development and domestic consumption. Recognizing the crucial role of consumer confidence in this transition, the government has unveiled a series of targeted measures aimed at stimulating spending and fostering sustainable growth.
In a recent Politburo meeting, officials acknowledged new challenges facing the economy, particularly insufficient domestic demand. However, they expressed optimism, noting that “the economy has tremendous resilience and potential for development, and its long-term sound fundamentals remain unchanged.”
Following this, the State Council announced 20 specific initiatives designed to restore and expand consumption. These include easing restrictions on automobile purchases, supporting the demand for first-time homebuyers and those seeking upgraded housing, and promoting consumption in cultural tourism sectors.
The measures are notably detailed. For instance, to boost consumption of home decoration and electronic products, the government plans to promote smart home appliances and functional furniture, improve after-sales services for household electronics, and facilitate the exchange of old appliances for new ones. There is also a focus on leveraging new technologies such as ultra-high-definition video, virtual reality, and flexible displays to develop wearable devices and smart products, creating new consumer scenarios.
Priorities in expanding consumption include digital consumption, with an emphasis on e-commerce platforms, and green consumption, particularly low-carbon and energy-saving products.
Looking beyond short-term strategies, the Chinese mainland is committed to a long-term shift in economic activity from investment to household consumption. Currently, household consumption accounts for approximately 38% of China’s GDP, significantly lower than the global average of 60% and the United States’ 70%.
In alignment with this objective, guidelines released last December outline plans extending to 2035. These plans aim to achieve goals of new industrialization, informatization, urbanization, and agricultural modernization. The country intends to boost investment in consumption, optimize distribution channels, enhance supply quality, and improve market systems.
The directives stress enhancing traditional consumption areas such as food and clothing quality, travel services, residential consumption including housing and home improvements, and expanding service consumption. There is also an emphasis on advocating for green and low-carbon consumption, cultivating cultural and tourism consumption, augmenting elderly care and childcare services, improving educational services, promoting mass sports consumption, and encouraging the sharing economy.
As the Chinese mainland navigates this economic transition, restoring consumer confidence remains at the forefront of its strategy. By implementing both immediate measures and long-term plans, the government aims to unlock domestic demand’s full potential, fostering sustainable economic growth for the future.
Reference(s):
cgtn.com
