China's retail sales to grow 10pc in 2018
China is expected to see retail sales of consumer goods expand about 10 percent to exceed 40 trillion yuan ($6.38 trillion) this year, a report showed Tuesday.
The strong consumption growth will be powered by innovative products and services as more affluent Chinese are willing to pay for higher quality and unique experiences, according to a report from the research institute of the China Council for the Promotion of International Trade (CCPIT).
Smart services enabled by
the internet will be the most powerful engine for consumption growth this year, said Zhao Ping, a researcher with the institute. China's retail sales of consumer goods expanded 10.2 percent to exceed 36 trillion yuan in 2017, official data showed.
The report also estimated that consumption will contribute to over 60 percent of total GDP growth while consumption gaps between urban and rural areas as well as among different regions will narrow.
Retail sales in rural areas are likely to grow 12 percent this year, about 1 to 2 percentage points faster than that in urban areas, according to the report. Meanwhile, China's consump- tion will continue to play an integral role in boosting China's economic development and contribute over 60 percent of GDP growth, a new report said. The country also made considerable progress in services and innovative commodity consumption last year, two sectors that are expected to provide the much-needed momentum for the upgrade and growth of the sector, the China Council for the Promotion of International Trade Academy (CCPIT Academy) said in its report.
Total retail sales of consumer goods are estimated to reach 40 trillion yuan ($6.35 trillion) in 2018, with a nominal annual growth rate of about 10 percent and continuing the sequen- tial growth trend of the last 14 years.
According to CCPIT Academy, consumption has increased in the country largely due to increases in average income levels. "China is now in the group of middle-income countries. As a result, both the growth rate and the percentage of commodity consumption have been declining with service consumption the lone bright spot and the mainstay of the economy," it said.
Experiential consumption, or consumption driven by the desire for memorable experiences, as part of service consumption, has been growing steadily in China. Consumption pertaining to e-commerce, such as buying products from self-service supermarkets, purchasing flowers online are expected to trigger the consumption spree in this sector, said Zhao Ping, director of the international trade research department at CCPIT Academy and the author of the report.
"Besides, as artificial intelligence, cloud computing and big data technologies mature, the innovative commodity consumption sector, such as smart homes, and internetconnected cars, will see lots of growth," she added.
Ning Jizhe, head of the National Bureau of Statistics, said that domestic demand has always been a crucial pillar for China's economic growth.