Domestic consumption way forward

A shopper looks at cosmetics during a sales promotion in Lanzhou, Gansu province. [Photo by Pei Qiang/China Daily]

China will comprehensively promote consumption to further tap its potential in supporting economic development while maintaining stable macroeconomic policies to anchor market expectations, said a senior official on Friday.

Analysts said such moves are a reflection of a dual-circulation development strategy, and also reflect the nation’s emphasis on high-quality development.

“The country will comprehensively promote consumption toward the green, healthy and safe spectrum, develop service consumption and encourage new consumption models and new business forms,” said Ning Jizhe, deputy head of the National Development and Reform Commission.

“We will place more emphasis on promoting the stability of policies and market expectations as well as on smoothing out economic circulation,” Ning said.

He made the remarks at a news conference on the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China, which outlined key guidelines for China’s future development plans.

China will promote the consumption transformation of consumer goods to focus more on utilization-related consumption rather than purchase-based consumption, as well as promote healthy development of housing consumption, said Ning, who is also head of the National Bureau of Statistics.

Other measures needed to strengthen consumption and enhance people’s livelihoods include developing contactless transaction services, promoting the integrated development of online and offline consumption, boosting urban and rural consumer markets, spurring holiday consumption, improving the consumption environment and strengthening consumer rights protections.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said smoothing domestic circulation-including enhancing high-quality development of the domestic market to better meet diversified needs of consumers-is key for China in the next five years to drive high-quality economic development.

“Promotion of consumption is no longer just for the stimulation of economic growth under the new circumstances of dual-circulation development,” Zhou said.

“High-quality and diverse supplies of consumer goods and services, together with increased spending power and improvements in consumer rights protections, will help form a consumer-oriented domestic market to bolster high-quality development of the overall economy,” he added.

Tang Jianwei, a chief researcher at the Financial Research Center of the Bank of Communications, said it is important to remove existing constraints that restrict domestic consumption and private investment activities, and release domestic consumption and investment growth potential in order to nurture a powerful domestic market.

Tang expects future policies that comprehensively promote consumption will include those that increase high-quality supplies and tap into new demand, improve employment, raise incomes and reinforce the social security system. Meanwhile, new measures to bolster investment may include those to eliminate restrictive policies to activate the vitality of various market entities, strengthen investments in key technology areas and promote high-quality development in infrastructure, transportation, energy and digitalization.

At the news conference, Ning also said China will focus more on maintaining the stability of macroeconomic policies while anchoring market expectations as part of the nation’s efforts to confront lingering challenges in the next five years.

Policymakers will work to better coordinate the targets of achieving reasonable economic growth, adding new jobs and stabilizing prices. Macroeconomic adjustments will be improved with better designs of policy direction, focus, strength and pace, he said.

The country faces a complex external environment with rising unilateralism and protectionism, while weak links in the domestic economy like unbalanced development remain, Ning said.

China must coordinate domestic and international factors and pursue development while ensuring security to resolve all kinds of risks in the upcoming 14th Five-Year Plan (2021-25) period, Ning said.

The NDRC will formulate the quantitative targets and indicators for the period in line with the session’s spirit, which the country’s top legislature will review next year, he added.

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