Consumption is an important engine to stimulate economic growth. General Secretary of the Supreme Leader stressed that it is necessary to enhance consumption capacity, improve consumption conditions, innovate consumption scenarios, and fully release consumption potential. The Central Economic Work Conference will focus on expanding domestic demand as one of the key tasks in 2023. In the context of weakening external demand, the importance of consumption is further highlighted, and it is urgent to further release the consumption potential and give priority to restoring and expanding consumption. With the smooth transition of epidemic prevention and control, the consumption potential was gradually released in the first half of the year, and the consumer market recovered steadily, but there are still some challenges that deserve attention.
The fundamentals of consumption are improving for a long time.
China’s population is large, the consumer market is vast, the consumer market generally continues to recover, and the fundamentals are improving for a long time. Data show that in the first half of this year, the total retail sales of social consumer goods increased by 8.2% year-on-year; The contribution rate of final consumption expenditure to economic growth was 77.2%, which was significantly higher than last year. From the perspective of long-term development, the steady increase of urbanization rate in China will provide strong support for the stable development of China’s consumer market.
At present, residents’ demand for quality consumption continues to increase, the concept of green environmental protection is more deeply rooted in people’s hearts, the willingness to consume services is strong, and the consumption structure continues to be optimized and upgraded. With the innovation and expansion of consumption scenes, the steady growth of residents’ income, the continuous improvement of market supply, the continuous enrichment of consumption patterns and the further increase of the proportion of online consumption. The data shows that in the first half of this year, the online retail sales of physical goods in China increased by 10.8% year-on-year, accounting for 26.6% of the total retail sales of consumer goods.
At the same time, it also has the characteristics of fast recovery of county and township consumption and great potential of consumption market. The rural market recovered faster than that of cities and towns. According to the data, the retail sales of rural consumer goods increased by 8.4% year-on-year in the first half of the year, and the growth rate was 0.3 percentage points faster than that of cities and towns, which has great growth potential.
Promoting household consumption still faces constraints.
In terms of consumption power, the slow growth of residents’ income and unreasonable income distribution restrict the improvement of residents’ consumption power. In recent years, the growth momentum of residents’ income in China has not changed, but the growth rate has slowed down, so it is difficult to continuously promote residents’ income. Problems still exist, such as the large income gap, the low proportion of labor remuneration in the initial distribution and the low proportion of residents’ income in the national income distribution. It is urgent to adjust the national income distribution pattern, continuously increase the income of urban and rural residents and continuously narrow the income gap.
In terms of consumption willingness, the increase in employment pressure leads to the instability of residents’ income expectations and affects consumption willingness. At present, the total employment pressure and structural contradictions coexist, and the employment situation of key groups is grim. The intensification of job competition, mismatched overlapping skills, asymmetric information, and changes in job-hunting concepts have led to greater employment pressure for young people. It should also be noted that the aging of the population and other problems have led to the relatively weak willingness of the elderly to consume.
In terms of consumption environment, the consumption scene is not perfect, the types of supply are not rich enough, the quality needs to be improved, and the multi-level consumer demand is not fully met. In particular, the rural consumption environment needs to be improved, which restricts the release of rural residents’ consumption potential.
Release consumption potential with powerful measures
First, improve the income level of residents and improve the income distribution system. Optimize the wage structure, intensify the reform of the salary system, and stabilize the income expectation. Encourage entrepreneurship to drive employment and give play to the multiplier effect of entrepreneurship to drive employment. Actively increase investment in basic education and vocational education, improve labor productivity, and lay the foundation for residents’ income growth. By revitalizing land elements and enriching financial products that residents can invest in, we will increase residents’ income through multiple channels, expand the scale of middle-income groups, and enhance residents’ consumption power.
Second, create new consumption scenarios and expand new consumption patterns. Accelerate the organic integration of online and offline consumption, cultivate and expand new consumption formats such as "internet plus" and stimulate consumption vitality. Strengthen the construction of new consumption infrastructure, vigorously develop new consumption such as digital consumption, and expand immersive, experiential and interactive consumption scenarios. Continue to improve the offline consumption environment of residents, create a number of key business districts and characteristic blocks, and enhance the city’s "fireworks".
Third, create a fair and orderly consumption environment. Improve the quality standard system of consumer goods, and improve the service standards and technical standards in key consumption areas. Comprehensively strengthen cross-regional, cross-departmental and whole-process collaborative supervision, speed up the construction of consumer credit system, and increase supervision and punishment of illegal acts such as false propaganda, counterfeiting and confusion, counterfeiting and selling, and price fraud. Establish and improve the information publicity system of consumer complaints, further optimize the diversified settlement mechanism of consumer disputes, and comprehensively strengthen the protection of consumer rights and interests.
Fourth, optimize consumption supply and build a high-end, diversified and multi-level commodity and service supply system as soon as possible. Continuously improve the adaptability of the supply system and meet the escalating consumer demand with high-quality supply. Promote the upgrading of medical health consumption and develop more products and services suitable for the consumption of the elderly and infants. We will comprehensively promote the transformation and upgrading of green and low-carbon consumption, support the accelerated development of new energy vehicles, actively promote green building materials and green home decoration, and advocate green travel. Improve the county commercial system and guide large-scale commercial circulation enterprises, e-commerce platforms and modern service enterprises to extend to rural areas.
(This article Source: Economic Daily Author: Zhang Xueyong, special researcher of Beijing Supreme Leader New Era Socialism with Chinese characteristics Thought Research Center and dean of Finance College of Central University of Finance and Economics)
