Policy dividends continue to release 20 measures to accelerate consumption in the second half of the year.
Expanding domestic demand is organically combined with deepening supply-side structural reform. Optimizing supply based on demand will provide more choices for residents.
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In the last few days of July, a set of consumer credit data annotated China’s consumption situation in the first half of the year: data released by the State Administration of Financial Supervision showed that by the end of June, credit cards, automobiles and other comprehensive consumer loans had increased by more than 710 billion yuan compared with the beginning of the year. According to data released by the central bank, in the first half of the year, personal business loans increased by 2.3 trillion yuan, an increase of 759.3 billion yuan year-on-year. Among them, personal short-term consumer loans increased by 300.9 billion yuan, an increase of 401.9 billion yuan.
"In the first half of this year, the GDP growth rate reached 5.5%, exceeding the forecast target of around 5% set at the beginning of the year, of which consumption made an important contribution." For example, Li Chunlin, deputy director of the National Development and Reform Commission, said on July 31 that in the first half of the year, the total retail sales of consumer goods in China increased by 8.2% year-on-year, reaching a total of 22.75 trillion, and the automobile sales reached 13.239 million, up by 9.8% year-on-year. "Residents’ willingness to consume has recovered."
On this day, "Measures on Restoring and Expanding Consumption" (hereinafter referred to as "Measures") was released to the public. Focusing on stabilizing bulk consumption, expanding service consumption, promoting rural consumption, expanding new consumption, improving consumption facilities and optimizing consumption environment, the Measures put forward 20 measures to promote consumption recovery and expansion.
"Targeted" is the view of many scholars on this 4,000-word measure document. Li Changan, a professor at the National Institute of Opening-up in university of international business and economics, told the reporter of China Youth Daily and China Youth Network that the "Measures" have grasped some key problems and weak links in current consumption, such as focusing on the consumption of bulk commodities such as automobiles and homes, which have a great role in stimulating the economy. "This is also the blocking point, difficulty and key consumption demand in the current consumption recovery process."
Bai Ming, a member of the Academic Degree Committee of the Ministry of Commerce, noted that in promoting rural consumption, the Measures specifically mentioned "promoting featured products to enter the city". The first two measures were "developing green products to the countryside" and "improving rural e-commerce and express logistics distribution system".
"Green products going to the countryside and special products entering the city are a two-way interaction and mutual satisfaction of demand." In Bai Ming’s view, promoting consumption should consider the purchasing power of consumers while meeting the demand, and "let farmers have money to spend".
Policy dividends continue to be released.
"Promoting consumption" is the key to boosting economy. As early as the end of last year, the Central Economic Work Conference pointed out that restoring and expanding consumption should be given priority. This year’s "Government Work Report" also proposes to give priority to restoring and expanding consumption, increase the income of urban and rural residents through multiple channels, stabilize mass consumption such as automobiles, and promote the recovery of consumption of catering, culture, tourism, sports and other life services.
A week before the promulgation of the Measures, the Political Bureau of the Communist Party of China (CPC) Central Committee once again stressed at the meeting to analyze and study the current economic situation and work that we should actively expand domestic demand and give play to the basic role of consumption in stimulating economic growth.
"Expanding domestic demand", a national strategy put forward in 1998, gradually focused its deployment on the endogenous power of consumption. Wang Yiming, vice chairman of China International Economic Exchange Center and former deputy director of the State Council Development Research Center, analyzed at the 2023 annual meeting of China Development Forum held in the first half of this year that since the strategy of expanding domestic demand was put forward in 1998, China’s policy focus has been mainly on expanding investment demand, and a set of policy frameworks and tools have been formed to guide local governments and enterprises to expand investment, but the means and tools for expanding consumption are relatively limited. "With the narrowing of the space for expanding investment and the decline of marginal efficiency, the role of expanding consumption in sustained and stable economic growth is particularly important."
How to innovate the policy tools to expand consumption and improve the system and mechanism to expand consumption has become the key to release the potential of consumer demand. In Bai Ming’s view, after the international financial crisis, China emphasized steady growth, expanding domestic demand, adjusting the structure, and giving play to the driving role of domestic demand in the economy. "After more than 10 years of adjustment, China has gradually shifted from a large dependence on exports to a simultaneous effort in the domestic and foreign demand markets."
Taking the development of "new three kinds" of foreign trade, namely new energy vehicles, lithium-ion batteries and solar cells, as an example, he said that "new three kinds" not only led the export, but also took the lead in domestic sales.
According to the data of the National Development and Reform Commission, in terms of the production and sales of new energy vehicles, the production and sales of new energy vehicles were 3.788 million and 3.747 million respectively in the first half of the year, up by 42.4% and 44.1% respectively. In terms of market share, the sales of new energy vehicles account for nearly 30% of all automobile sales.
"After extending the vehicle purchase tax exemption policy for new energy vehicles last year, the consumption of new energy vehicles has increased and expanded significantly, and the policy orientation of this year’s Measures is more clear." In Li Changan’s view, the continuity of this policy will also have a positive impact on the market performance of related products.
It is understood that the current vehicle purchase tax reduction and exemption policy for new energy vehicles has been extended to the end of 2027.
Transformation industry meets opportunities.
"This" Measures "introduced reform measures to promote automobile consumption, including optimizing automobile purchase restriction policies, promoting used car transactions, encouraging trade-in, increasing consumer finance, and increasing the supply of parking spaces. The automotive industry, especially new energy vehicles, has achieved significant benefits. " Zhang Xuezhi, a professor at the School of International Finance of Sun Yat-sen University, told reporters that Chinese auto companies are expected to make breakthroughs in technical strength, market share and brand influence.
In fact, including automobile enterprises, the Measures "add another fire" to the transformation and upgrading of enterprises in many traditional industrial chains.
Xu Xingfeng, director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, took the home improvement industry as an example, saying that the home put forward by the Ministry of Commerce is a concept of "big household", including household appliances, furniture, home textiles, home improvement and housekeeping, and the market scale is very huge.
He said that the "Measures on Promoting Household Consumption" jointly issued by the Ministry of Commerce and 12 departments on July 18 put forward related measures. In terms of stabilizing mass consumption, the "Measures" mentioned the promotion of smart home appliances, integrated home appliances, functional furniture and other products to improve the level of intelligent green home.
"This will not only boost market confidence and promote household consumption, but also help improve consumers’ quality of life and health, which will be of great benefit to promoting the high-quality transformation and upgrading of the household industry." The relevant person in charge of Jiumu Group, a domestic sanitary ware brand, told the reporter that industry estimates show that for every 10% increase in the household penetration rate of smart toilets in China, the market will increase by nearly 100 billion yuan, and the market will increase by 800 billion yuan if the household penetration rate in China is increased to 80%. "The overall market volume of China Digital Smart Sanitary Ware will reach trillions, and the market potential is huge."
Many transformation enterprises, including Jiumu Group, take intelligence and greening as the direction of product upgrading and lay out the future. This is also the key word of the Measures.
In terms of expanding new consumption, the "Measures" specifically mentioned the promotion of green consumption, clearly improving the production and promotion mechanism of green low-carbon products, and promoting the green renewal and quality upgrading of residents’ durable consumer goods. Improve the energy-saving and low-carbon and green manufacturing standard system, improve the certification and labeling system of green products, and encourage the development of group standards and enterprise standards in advance.
"Promoting consumption is not only a discount for businesses"
Driven by the policy, more products and services enrich people’s shopping carts, but the money in the wallet is often waiting for a more cost-effective opportunity.
In Bai Ming’s view, promoting consumption is not only a discount for merchants, but also a reliable product. "It must not only meet the purchase demand, but also reflect environmental protection and high quality." He further explained that promoting market consumption is a systematic project and a chain, which includes consumption capacity, consumption hotspots, consumption desire, consumption environment, etc., and requires the cooperation of many departments.
It can also be seen from the implementation of the Measures that the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Commerce, the Ministry of Culture and Tourism, the General Administration of Market Supervision and other ministries and commissions will continue to issue follow-up supporting measures. "Each of us is a consumer, and improving the consumption environment is an important support for restoring and expanding consumption." Kuang Xu, director of the Law Enforcement Inspection Bureau of the General Administration of Market Supervision, said that daring to consume and willing to consume are closely related to market supervision. In the future, the General Administration of Market Supervision will start from three aspects: building a system, keeping the bottom line and raising the line, and strive to create a secure consumption environment and promote the quality and expansion of consumption.
It is worth noting that behind the upgrading and expansion of consumption is the concern of the government and enterprises for new demand.
Ma Yiliang, chief statistician of china tourism academy, noticed that a major change in the tourism market this year is that some local governments pay attention to stimulating tourism consumption from the demand side. "Unlike the previous behaviors of focusing on supply such as building scenic spots and creating brands, more and more local governments are looking for innovations directly on the demand side, such as holding activities such as village BA to attract tourists, making head scenic spots free and managing price increases."
In Ma Yiliang’s view, on the one hand, individual businesses often don’t have enough ability to hold activities independently, on the other hand, it also meets the current consumer demand of tourists, that is, paying more attention to what activities or travel can bring.
As a key area of service consumption, cultural tourism consumption also occupies a certain space in the Measures. Zhang Xuezhi noted that the Measures clearly and comprehensively implemented the paid vacation system, encouraged off-peak vacations, flexible work and rest, and promoted holiday consumption. On the basis of ensuring tourists’ right to choose independently, the Measures support different regional scenic spots to jointly implement the joint ticket mode, and encourage scenic spots to implement the one-ticket, multiple-time and multi-day use system in combination with the actual situation to better meet the diversified needs of tourists.
"Expanding domestic demand is organically combined with deepening supply-side structural reform." In Zhang Xuezhi’s view, optimizing supply based on demand will provide more choices for residents. (Zhongqing Daily, Zhongqing.com reporter Zhu Caiyun)