China is taking steps to bolster consumption in a key move to stimulate a flagging economy this year.
With rising spending power among its population of 1.4 billion and growing urbanisation, there is untapped potential in a huge consumer market, said the country’s state planner on Wednesday (March 06) on the sidelines of its annual parliamentary session.
Consumption has been the main driver of China’s economic growth for six consecutive years, accounting for 76 per cent of its GDP growth last year.
Total retail sales grew by 9 per cent last year, although the rate was slightly slower than the year before.
With GDP expansion expected to slide below 6.5 per cent this year, the government is moving to shore up the economy by encouraging greater consumption, especially in new energy vehicles, household appliances and tourism, said Mr Ning Jizhe, vice head of the National Development and Reform Commission.
It will also make e-commerce more accessible to rural-dwellers.
On Tuesday, Premier Li Keqiang said in his Budget speech that the government will boost personal incomes by reducing taxes and creating more jobs as the country trains its focus this year on an “employment-first policy.”
The economic planner yesterday also said it will increase the number of beds at elderly-care facilities in the next three to five years and improve childcare services, as these have been under-catered.
Also in the pipeline are efforts to strengthen consumer rights protection while cracking down on fake or shoddy products with heftier penalties.