Consumption gradually strengthens its role in driving the economy (Mid year Economic Observation) Scenarios | Consumption | Economy
General Secretary Xi Jinping stressed, "China's new industrialization, informatization, urbanization and agricultural modernization are advancing in depth, and consumption is increasingly becoming a fundamental force driving economic growth. It is necessary to enhance consumption capacity, improve consumption conditions and innovate consumption scenarios so that consumption potential can be fully released." "Establish and improve a long-term mechanism to expand residents' consumption, so that residents can consume with stable income, dare to consume without worries, and have a strong sense of willingness to consume with a good consumption environment."
The Political Bureau of the Central Committee of the Communist Party of China held a meeting on July 24th to analyze and study the current economic situation and deploy economic work for the second half of the year. The meeting emphasized the need to actively expand domestic demand, leverage the fundamental role of consumption in driving economic growth, expand consumption by increasing household income, drive effective supply through terminal demand, and organically combine the implementation of the strategy of expanding domestic demand with deepening supply side structural reform. To boost bulk consumption of automobiles, electronic products, home furnishings, and promote consumption of sports, leisure, cultural tourism, and other services.
Since the beginning of this year, various regions and departments have prioritized the restoration and expansion of consumption, successively launched a series of consumer promotion policies and measures, organized and carried out a variety of consumer promotion activities such as the Green Consumption Season, International Consumption Season, and Double Product Online Shopping Festival, forming more new consumption scenes, models, and supplies, and promoting the continuous recovery and improvement of the consumer market.
In the first half of the year, the total retail sales of consumer goods in China reached 2275.88 billion yuan, a year-on-year increase of 8.2%. The contribution rate of final consumer spending to economic growth reached 77.2%, and its driving effect on economic growth gradually strengthened.
Consumption maintains a positive trend of recovery
At around 6 o'clock in the morning, Zhang Hongjin, the person in charge of the Bert Youyue Hotel in Qingdao, Shandong, was busy. This hotel, located in a popular tourist area, has been fully booked every day since the peak tourist season in June. "The peak season has arrived, and the booking popularity continues to rise."
From crowded tourist attractions to long queues of restaurants, from record breaking movie box office sales to booming train tickets, the bustling consumer scene has witnessed the enormous potential of China's consumer market and demonstrated the resilience and vitality of China's economy. In the first half of the year, China's consumption significantly rebounded and the overall recovery was positive, not only with an increase in quantity, but also with a qualitative upgrade and structural optimization, showing impressive performance.
The recovery momentum of cultural and tourism is strong. Some business formats have recovered to the same period in 2019 or even higher. During the Dragon Boat Festival holiday, according to the comprehensive calculation of the Data Center of the Ministry of Culture and Tourism, there were 106 million domestic tourism trips, a year-on-year increase of 32.3%, which is 112.8% of the same period in 2019 according to comparable standards; Realized a domestic tourism revenue of 37.31 billion yuan, a year-on-year increase of 44.5%.
The market for upgraded products is active. A series of policy combinations such as carrying out various consumer promotion activities, implementing measures for the second-hand car market, supporting the development of new energy vehicles in rural areas, and accelerating the construction of charging infrastructure have promoted the rapid growth of automobile consumption. In May, the retail sales of automobiles in units above designated size increased by 24.2% year-on-year. In addition, the retail sales of communication equipment, gold and silver jewelry, and sports and entertainment products for units above the quota increased by 27.4%, 24.4%, and 14.3% year-on-year, respectively.
The consumption of catering and other services continues to rise. In the first half of the year, the Ministry of Commerce actively organized the "Chinese Cuisine Hui" series of catering consumption promotion activities, promoted catering brands, boosted catering consumption, and promoted high-quality development of catering. During the May Day holiday, the Ministry of Commerce monitored a year-on-year increase of 57.9% in sales of catering enterprises. In the first half of the year, the national catering revenue increased by 21.4% year-on-year, with a growth rate 13.2 percentage points higher than the total retail sales of consumer goods.
The synchronous recovery of urban and rural consumption. In the first half of the year, relevant departments and local governments accelerated the construction of international consumer center cities, urban pedestrian street renovation and business upgrading, accelerated the construction of smart commercial districts and 15 hour convenient living circles, improved the county-level commercial system, and continuously unleashed the potential of urban and rural consumption. The retail sales of consumer goods in urban and rural areas increased by 8.1% and 8.4% year-on-year in the first half of the year, respectively.
Online and offline consumption is growing rapidly. Online retail has maintained rapid growth. From January to May, the online retail sales of physical goods in China reached 4.81 trillion yuan, a year-on-year increase of 11.8%, accounting for 25.6% of the total retail sales of consumer goods in society. The offline scene is accelerating recovery, and physical retail continues to rebound. In May, the Ministry of Commerce monitored sales of department stores, specialty stores, and supermarkets, which increased by 14.5%, 13.3%, and 5.8% year-on-year, respectively.
"The biggest confidence in restoring and expanding consumption comes from the basic economic situation." Zhang Jixing, Deputy Director of the Market Research Department of the Research Institute of the China Council for the Promotion of International Trade, believes that since the beginning of this year, China's economy has shown a rebound and positive trend, and the overall employment situation has improved, which is conducive to increasing residents' income and improving consumption capacity. At the same time, a series of policies and measures to restore and expand consumption have been introduced and implemented, gradually restoring market demand and promoting rapid growth in consumption.
New scenarios and formats form new growth points
"Look, the big fish is running out of the screen!" said Xue Lan, a small tourist who came to watch 3D light and shadow at the Liuye Lake Tourist Resort in Changde City, Hunan Province. In the picture, white cranes dance on the shimmering Liuye Lake, and "Liuye crucian carp" seem to emerge from the screen. It is an immersive visual experience based on local historical legends, allowing tourists to experience more cultural flavor in leisure tourism.
The consumption of Chinese residents presents diverse, multi-level, and multifaceted characteristics. To fully unleash the potential of the consumer market, it is necessary to increase the supply of high-quality products and services, and promote a virtuous cycle of supply and demand at a higher level. In the first half of the year, various regions and departments continuously improved the quality of domestic supply, and new consumption scenarios represented by food, culture, and tourism continued to emerge. The popularity of new business models such as live streaming sales, instant retail, and first store economy increased, adding new vitality to the consumer market.
New Scenarios Refreshing Consumer Experience——
The "hot pot bus" shuttling on Chunxi Road in Chengdu, Sichuan has attracted a group of consumers to taste delicious food and enjoy cultural feast. Entering the car, there are all kinds of equipment available, including ambient lighting on the roof, a front music stand, and a rear LCD TV. The retro decorated carriage is decorated with 8 dining tables, and outside the half person high glass window, the bustling Chengdu street scenery slowly flows as the vehicles start. Red oil hot pot, specialty crispy pork, brown sugar glutinous rice cake... The dishes offered by catering buses will vary according to the season.
New business formats stimulate consumption potential——
At the beginning of the night, taking a boat night tour has become a new choice for tourists to experience cultural and tourism in the ancient city of Taierzhuang, Zaozhuang City, Shandong Province. Accompanied by a small tune from southern Shandong, a rowboat with red lanterns sways in the rippling water streets and alleys. The fishing lantern alley, separated from the ancient city scenic area, is also bustling with activity. The characteristic block with a total construction area of 120000 square meters gathers various businesses such as food and snacks, intangible cultural heritage, etc. "Visiting during the day and relaxing at night makes the journey even more diverse," said Liu Xia, a Beijing tourist who had watched a night performance. During the May Day holiday, Taierzhuang Ancient City received a total of 306700 tourists, of which overnight tourists accounted for about 80% of the total number of visitors.
New models add vitality to consumption——
"Placing an order on a mobile phone and delivering it to your doorstep in less than half an hour is really convenient!" Li Wei, a resident of Shangdi Street in Haidian District, Beijing, is usually busy with work and has little time to go shopping. "Online transaction platforms place orders, offline physical retailers receive orders online, and then perform delivery" has become his main way of shopping through real-time retail. Whether you're craving snacks or missing ingredients while cooking, pick up your phone and open the app to place an order. Soon, a delivery rider will deliver the product to your door.
"New formats and models are becoming important new growth points in the consumer market." Hong Yong, associate researcher at the E-commerce Research Institute of the Research Institute of the Ministry of Commerce, believes that the characteristics of strong resilience, great potential, and abundant vitality in China's consumption have not changed, the long-term positive fundamentals of consumption development have not changed, and the overall trend of improving and upgrading consumption has not changed. In the first half of the year, the market continuously increased the supply of high-quality products and services, making consumers more willing to pay for new products and services, while creating new demand and stimulating greater consumption potential.
Improve policy measures to stimulate greater consumption momentum
On July 12, the launching ceremony of "2023 National Summer Consumption Season and Night long Chongqing Life Festival" was held in the Cross Golden Street of Monument to the people's Liberation, Chongqing. During the summer consumption season, various regions will organize and hold a variety of consumption promotion activities to better meet the diverse consumption needs of residents such as summer vacation, RV camping, leisure tourism, night consumption, and summer vacation.
The policy plays a crucial role in restoring and expanding consumption.
In the first half of the year, various regions and departments focused on promoting high-quality development in the automotive, home furnishings, brand consumption, and catering industries, promoting the introduction of a series of policy measures to support the recovery and expansion of consumption. They held a series of activities such as the Spring Consumption Season, National Consumption Promotion Month, Green Consumption Season, and International Consumption Season, igniting people's enthusiasm for consumption.
At the Sam's Club in Wuxi, Jiangsu, citizen Li Xiao used a Wuxi shopping voucher promotion's "100 yuan off for over 400 yuan" department store retail voucher when checking out. "In less than a week, more than 3000 customers came to the store to use vouchers," said the head of the marketing department of the Sam's Club in Wuxi. Since the beginning of this year, Jiangsu has carried out more than 1400 consumer promotion activities, distributing 120 million yuan of consumer vouchers and 35 million yuan of digital RMB red envelopes, promoting the continuous recovery of the consumer market.
To promote sustained economic recovery and improvement, it is necessary to fully leverage the fundamental role of consumption.
"At present, we should continue to prioritize the recovery and expansion of consumption, and fully leverage the promoting role of consumption in achieving the annual development goals." Hong Yong said that consumption is a key link and important engine for smooth domestic circulation, which has a lasting driving force on the economy and is related to ensuring and improving people's livelihoods.
Zhang Jixing said that overall, China's consumption fundamentals have been improving in the long term. China has a population of over 1.4 billion, with a per capita GDP exceeding 12000 US dollars, and vast space for consumption growth. The sustained efforts of consumption promotion policies will further enhance consumer willingness. In addition, new formats and models continue to emerge, bringing new impetus to consumer growth. However, it should also be noted that the current consumption growth still faces some constraints, and there is still room for improvement in the consumption capacity and willingness of residents. In the next stage, we will continue to focus on improving the consumption capacity of residents, continuously improving consumption conditions, fully leveraging the effects of consumption promotion policies, and promoting the stable recovery of the consumption market.
The relevant person in charge of the Ministry of Commerce stated that they will continue to improve consumption policies and strengthen departmental collaboration. According to the deployment and arrangement of the "Consumption Boosting Year", organize summer consumption season and other consumer promotion activities. Promote the construction of smart business districts, link commerce, tourism, culture, and sports, create more immersive, interactive, and experiential consumption scenarios, further stimulate market vitality, and inject stronger momentum into promoting sustained economic recovery and improvement.
