October 31, 2022
BEIJING – China’s latest move to implement a package of policy measures like spurring consumption is expected to further enhance consumers’ purchasing power, boost the recovery of consumption and stabilize the country’s economic growth, experts said.
Their comments came after it was announced at a State Council executive meeting on Wednesday that China will promote the recovery of consumption as the main driver of the economy.
Construction of key projects and equipment upgrading and renovation should be better aligned with the goal of spurring consumption, and public works programs will be expanded to create jobs, raise income and boost consumption, according to a decision made at the meeting.
Equipment upgrading and renovation by micro, small and medium-sized businesses and related to consumption will be supported by special relending facilities and government-funded interest subsidies, it added.
Wang Yun, a researcher at the Academy of Macroeconomic Research, said the latest stimulus measures to boost consumption have demonstrated the country’s intensified efforts to give full play to the fundamental role of consumption in driving economic growth.
“China’s retail sector witnessed a recovery of growth in the third quarter of this year, showcasing the strong resilience of the country’s consumption market,” Wang said, estimating that consumption growth will gather pace in the fourth quarter.
She said the new supportive policies mainly focus on expanding employment, increasing residents’ income, improving their purchasing power, as well as upgrading the supply of consumer goods.
Wang added that special relending facilities for equipment upgrading and renovation will encourage more enterprises to update equipment and speed up product innovation so as to meet the demand produced by the country’s ongoing consumption upgrade.
Consumption has become the bedrock for China’s stable economic growth. Data from the National Bureau of Statistics showed that China’s final consumption expenditure contributed to 52.4 percent of domestic economic growth in the third quarter, driving GDP growth by 2.1 percentage points.
With economic activities generally perking up, China’s consumer market has warmed up in the third quarter. The country’s total retail sales of consumer goods, a vital consumption indicator, rose 3.5 percent year-on-year in the third quarter, reversing the 4.6 percent decline logged in the second quarter.
In the first three quarters, total retail sales of consumer goods reached 32.03 trillion yuan ($4.4 trillion), up 0.7 percent on a yearly basis, compared with the downward trend in the first half, when the number dropped 0.7 percent year-on-year, the NBS said.
China has rolled out a raft of measures to promote consumption recovery, including boosting consumption in key fields such as automobiles, green and intelligent home appliances as well as catering and accommodations.
Zhao Ping, deputy head of the Academy of China Council for the Promotion of International Trade, said China’s consumer market is likely to gain growth momentum in the coming months, fueled by better containment of the COVID-19 pandemic, a series of supportive policies to shore up consumption taking effect and the continued recovery of industrial and supply chains.