New opportunities to boost China’s consumption potential

BEIJING. - Although China's consumer market slackened amid the recent COVID-19 resurgence and floods, emerging opportunities and the consolidated policy backdrop will lend steam to the country's consumption growth looking ahead.

The epidemic situation and floods hindered travel and held back consumption during the summer holiday, sending the year-on-year growth rate of retail sales of consumer goods to 2,5 percent in August, down by 6 percentage points from July, according to the National Bureau of Statistics (NBS).

Acknowledging the short-term factors weighing on August's consumption performance, NBS spokesperson Fu Linghui Wednesday told a press conference that the overall stable recovery momentum of consumption has not wavered.

The cumulative growth of retail sales in the first eight months remained sound, at 18.1 percent, Fu noted, adding that the two-year-average growth rate slightly eased from that in the first seven months to 3.9 percent, maintaining overall stability.

Among the retail sectors surveyed by the NBS, online consumption remained vibrant, with sales in consumption-upgrade sectors squeaking out growth in August, according to Fu.

In the first eight months, online sales of physical goods expanded by 15.9 percent year on year, accounting for 23.6 percent of the total retail sales during the period.

In August alone, sales of goods in consumption- upgrade sectors, including sports and entertainment goods, and cultural goods and office utilities, both grew faster than in July, surging 22,7 percent and 20.4 percent from a year earlier, respectively, the NBS data shows.

Citing the aforementioned data, Fu told the press conference that the consumption scale is still expanding, while the consumption structure is upgrading and new growth drivers are developing.

In the meantime, China's consumer market also boasts great growth potential, especially in the sectors of eco-friendly and smart products, as well as those related to the elderly population.

To unleash the consumption potential, Fu said the country will strengthen effective supply by expanding production scales of smart home appliances and low-carbon products to meet people's aspirations for a better life.

The spokesperson is optimistic about future consumption activities, citing the upgrading demands of the large middle-income group of over 400 million people as an important factor at the press briefing.

Also noticing the short-term pressure on the country's consumer market, the country's top economic planner pledged to strengthen cooperation with relevant departments on the overall planning of consumption activities.

Supervision will be optimised to improve the consumption environment, Chang Tiewei, an official with the National Development and Reform Commission told a press briefing yesterday, adding that the market order will be further regulated to give consumers confidence in spending.

Reforms to spur consumption vitality, including removing administrative limits on shopping activities and relaxing market entry to the service consumption sector, will also be promoted, while weak links in logistics and e-commerce systems in rural areas will be strengthened, Chang added.

Also being optimistic about the future market prospects, Chang said that as COVID-19 is brought under control and consumption-promotion policies gain more steam, consumption will maintain restorative growth momentum later this year.

“Consumption will still serve as the cornerstone of China's economic development,” the NBS spokesperson Fu Linghui noted, expecting the epidemic-control efforts to take hold and the consumption environment to continue to improve.