2023 is the first year for the full implementation of the spirit of the 20th National Congress of the Communist Party of China, and the year for economic recovery and development after the three-year transition of new crown epidemic prevention and control. The mainland's economy has rebounded and high-quality development has been steadily promoted, and a series of achievements have been made in expanding domestic demand, optimizing the structure, boosting confidence, and preventing and defusing risks. At the same time, it should also be noted that the mainland is still facing some unfavorable factors in its development. The Central Economic Work Conference pointed out that "to further promote the economic rebound, we need to overcome some difficulties and challenges, mainly due to insufficient effective demand, overcapacity in some industries, weak social expectations, and still many hidden risks, and there are blockages in the domestic circulation, and the complexity, severity and uncertainty of the external environment are rising", and made important arrangements for "focusing on expanding domestic demand". In this regard, it is necessary to stimulate potential consumption, expand profitable investment, and promote consumption from post-epidemic recovery to continuous expansion.
The recovery trend is obvious
Since 2023, the CPC Central Committee has proceeded from the overall strategic situation, attached great importance to expanding domestic demand while stabilizing growth, put the recovery and expansion of consumption in a priority position, and launched a series of relevant policies to promote consumption, increase residents' income, improve the consumption environment, boost consumer confidence through multiple channels, and effectively promote the continuous recovery of consumption.
Judging from the relevant data in 2023, mainland consumption presents multifaceted characteristics.
First, consumption has continued to recover and become the main driving force for steady growth. In the first three quarters, final consumption expenditure contributed 83.2% to economic growth, and consumption played an important supporting role in stabilizing growth and high-quality economic development.
Second, the rapid release of consumer demand for services has led the consumer market to accelerate its recovery. The consumer market for catering, accommodation, culture, sports and tourism has shown a rapid recovery. From January to November, retail sales of services increased by 19.5% year-on-year.
Third, the vitality of innovative consumption is strong, and the driving role is more obvious. From January to November, the national online retail sales 139571 billion yuan, a year-on-year increase of 11.0%. Among them, the online retail sales of physical goods 117709 billion yuan, an increase of 8.3%, accounting for 27.5% of the total retail sales of consumer goods. New consumption models such as live-streaming e-commerce and instant retail have accelerated innovation.
Fourth, the income level has grown steadily. In the first three quarters, the per capita disposable income of residents nationwide increased by 5.9 percent in real terms, and residents' spending power continued to increase.
Fifth, the recovery of the international tourism market has been accelerated, driving the recovery of the mainland market. In the third quarter, immigration authorities nationwide inspected 123 million people entering and leaving the country, up 454.4 percent year-on-year, reaching 73 percent of the same period in 2019, and 6.431 million transport vehicles were inspected, up 182.4 percent year-on-year, reaching 73 percent of the same period in 2019.
The existing foundation is not yet solid
At present, the foundation for the continuous expansion of consumption in the mainland is still not solid, and there is a structural contradiction between overcapacity and insufficient supply of high-quality products and services in some industries. On the one hand, some traditional industries and export-oriented industries are facing the pressure of declining international market demand and upgrading domestic consumer demand, and some industries have overcapacity; on the other hand, the supply of high-quality products and services is relatively lagging behind, and it is difficult to match multi-level and diversified demand.
The mainland is in the stage of upgrading its consumption structure with a focus on service consumption, and service consumption is becoming the most important source of consumption growth, but at present, service consumption is still recovering, and there is still a lot of room for replenishment and expansion. Residents' consumer confidence and willingness to consume are weak, and the improvement of consumption capacity still needs to be accelerated. The growth momentum of consumption in traditional scenarios such as shopping malls and large supermarkets is insufficient, and new consumption scenarios have yet to be cultivated and matured. The slow recovery of inbound consumption and the increasing pressure on consumption outflow are still difficult due to factors such as the number of inbound and outbound flights, tourism reception capacity, overseas tourists' willingness and visa processing capacity. The insufficient supply of high-end consumption scenarios such as duty-free shops will also affect the attraction of consumption to a certain extent, which in turn will affect the consumption center cities and tourism center cities to give full play to the radiation driving role.
While it will take time for consumer expectations to improve across the board, the positives are also accelerating. The improvement of residents' employment has led to a steady increase in income, and the leverage ratio of residents has remained within a reasonable range. The overall supply of the consumer market is abundant, and the vitality of market innovation and the momentum of structural upgrading continue to be released. The increase in residents' willingness to travel will continue to drive market sentiment and the inbound consumption environment is expected to further improve. On the whole, in 2024, the mainland economy will continue to maintain a sustained and stable growth trend, the economic cycle will be smoother, the ability to cope with various risks and challenges will continue to be enhanced, and the role of consumption as the main driving force for economic growth will also be further strengthened.
Promote the continuous expansion of consumption
The external environment for the mainland's economic development remains grim, with increasing complexity, severity and uncertainty, and the world economic recovery is sluggish. In this context, we must persist in deepening supply-side structural reforms and focusing on expanding effective effective demand and making concerted efforts to give full play to the advantages of a super-large-scale market and strong production capacity.
It is necessary to continue to insist on expanding domestic demand, and strive to stimulate potential consumption, especially in view of the current new trend of consumption quality improvement, expansion, innovation, differentiation and transformation, focusing on guiding and promoting quality consumption, service consumption, digital consumption and green consumption, and accelerating the release of new consumption momentum. It is necessary to continue to highlight the key role of investment, focus on high-quality development, plan and implement major projects, and appropriately advance the layout and construction of major scientific and technological infrastructure. It is necessary to continue to deepen reform and opening up, focus on stimulating and enhancing economic vitality, give full play to the decisive role of the market in allocating resources, and form a higher-level dynamic balance between demand driving supply and supply creating demand, so as to achieve a virtuous cycle of the national economy.
From the perspective of policy orientation, the relevant policies for expanding consumption should be active and enterprising in promoting innovation, improving quality, adjusting structure, and stabilizing confidence on the basis of maintaining steady growth in consumption. At the same time, it will strengthen the coordination and cooperation with fiscal, monetary, employment, industrial, regional, science and technology, environmental protection and other policies, strengthen policy coordination, and ensure that the same direction is forced, forming a joint force.
The first is to promote consumption and conform to the new trend of consumption transformation and upgrading. In view of the current new trend of consumption transformation and upgrading in the mainland, we should cultivate and expand new consumption, vigorously develop digital consumption, green consumption, and healthy consumption, and actively cultivate new consumption growth points such as smart homes, cultural and entertainment tourism, sports events, and domestic "trendy products", so as to drive the steady expansion of the consumer market with new consumption.
The second is to combine the stabilization of traditional bulk consumption with the promotion of consumption quality upgrading. In recent years, the penetration rate of bulk consumer goods in the fields of housing, transportation and use in the mainland has increased significantly, and consumer demand has shifted from whether it is good or not, and the pace of quality improvement and upgrading has accelerated significantly. In this regard, we should not only stabilize and expand traditional consumption, but also focus on promoting the further upgrading of traditional consumption. Driven by standards for improving technology, energy consumption, and emissions, we will promote large-scale equipment renewal and trade-in of consumer goods. Combined with the development requirements of new technologies and new models, new energy vehicles, new electronic digital products, energy-saving household appliances and other new products are regarded as an important starting point for stabilizing and expanding bulk consumption.
Third, it is necessary to combine the expansion of consumption with the expansion of investment. It is necessary to better coordinate the supply-side structural reform and the expansion of domestic demand, stimulate potential consumption, expand profitable investment, create effective demand with high-quality supply, and form a virtuous circle in which consumption and investment promote each other. To this end, it is necessary to continue to highlight the key role of investment in order to release the new momentum of consumption upgrading. Accelerate the promotion of new industrialization, build a modern industrial system, focus on promoting the high-end, intelligent and green transformation of traditional industries, and vigorously expand new fields and new tracks such as emerging industries. Actively promote the quality and efficiency of the modern service industry, provide more high-level intermediate input and innovative elements for the upgrading of the manufacturing industry and the development of modern agriculture, and create new service supply to meet the new expectations of the people for a better life. At the same time, government investment must play a good guiding role, through government investment and policy incentives to effectively drive the investment of the whole society, give full play to the driving amplification effect of government investment, focus on supporting key core technology research, new infrastructure, energy conservation, emission reduction and carbon reduction, and cultivate new momentum for development.
Fourth, it is necessary to combine the stimulation of consumption potential with the continuous deepening of reform. We should focus on expanding domestic demand, not just planning and promoting in a single area, but also insisting on deepening supply-side structural reform and focusing on expanding effective demand. In particular, by continuously deepening the reform of the income distribution system, adhering to the "two unswerving", accelerating the construction of a unified national market, improving the investment and financing mechanism, and implementing a new mechanism for public-private cooperation, we will better stabilize employment, boost confidence, enhance vitality, increase the income of urban and rural residents, and expand the middle-income group, so as to create a good environment for the continuous expansion of consumption, innovation and upgrading.
(Source of this article: Economic Daily Author: Wang Wei The author is the former director and second-level researcher of the Institute of Market Economy of the Development Research Center of the State Council)
Source: Economic Daily