Cyber: Sales online a big contributor to economy
knowledge capability, economic vitality, innovation and the internet economy have been growing stronger, easing concerns over risks exerting downward pressure on growth.
“The internet economy, especially e-commerce, maintains exuberant growth momentum, along with emerging consumption patterns like niche online shopping,” said Ye Jingyi, a senior economist with the NBS.
China remains the world’s largest e-commerce market with online sales in the first quarter of this year reaching $307.4 billion, up 35.4 percent year-on-year.
In the US, online retail sales in the first quarter reached $123.6 billion, up 16 percent year-on-year, according to a report from PwC, a global professional services network.
Goldman Sachs forecast that this year, consumption in China may contribute 4.9 percentage points of the expected GDP growth rate of 6.6 percent, higher than 4.5 percentage points last year. But consumption is likely to slow next year, and is estimated to contribute 4.3 percentage points of the GDP growth.
The “still-solid labor market and steady wage growth” could support the positive expectation on Chinese consumption in 2019, said MK Tang, an economist with Goldman Sachs.
As per NBS data, unemployment rate fell marginally this year. “Our wage tracker suggests nominal wage growth stabilized at around 7.2 percent year-on-year this year, after moderating for three to four years since 2013. This should offset some of the downward pressures,” Tang said.
Recent surveys by the NBS and the central bank suggested that the consumer confidence level edged down of late, as reflected in fewer urban bank depositors willing to consume.
According to a Goldman Sachs report, expectation of further weakening in fixed-asset investments, especially in infrastructure, is likely to accelerate policy support measures to protect growth.
“Worries about a possible comeback of the debt-driven growth model, or a diminished economic role of private enterprises, weigh heavily on investors’ minds. Policymakers need to strike a fine balance between averting a sharp slide in growth and preventing a fast debt buildup,” GS said in its report.