Boosting consumption high on 2024 agenda

Economists: Focus should be on tasks such as spending on big-ticket items
China is likely to take more steps to revive consumer demand and boost spending appetites next year as it seeks to inject strong impetus into a consumption-led recovery amid pressure from subdued demand and property sector weakness, economists said on Wednesday.

They said boosting consumption will be a key step to expand domestic demand and revive recovery momentum next year, and the focus should be placed on key tasks such as boosting spending on big-ticket items and enhancing services consumption.

Their comments came as the tone-setting annual Central Economic Work Conference held in Beijing from Monday to Tuesday said China still has to overcome some difficulties and challenges — such as lack of effective demand — to further revive the economy.

The meeting, which maps out priorities for next year's economic work, said China will focus on spurring domestic demand, and efforts should be made to stimulate potential consumption, expand effective investment, and form a virtuous cycle between consumption and investment.

Wang Wei, former head of the Institute of Market Economy at the Development Research Center of the State Council, said the meeting signals more measures to boost domestic demand and expand consumption next year, including spurring new types of consumption, encouraging the purchase of big-ticket items and continuously deepening reforms of the income distribution system.

According to the high-profile meeting, the development of digital consumption, green consumption and health consumption should be further promoted, and new growth areas such as consumption of smart home appliances, entertainment and tourism, sports activities and trendy domestic brands should be fostered.

Consumption of products including new energy vehicles and electronics should be stimulated, while efforts should be made to increase incomes of urban and rural households and expand the scale of the middle-income group, the meeting said.

This year, the country has rolled out a raft of measures to boost consumption, including spurring auto and electronics consumption, expanding services consumption and supporting demand for first-home purchases as well as demand for upgraded housing.

Wang said such measures have significantly boosted household incomes, improved the consumption environment and boosted consumer sentiment, which helps promote a steady recovery in consumption and provides strong support for stabilizing growth.

Figures released by the National Bureau of Statistics showed retail sales, a key barometer of consumer spending, grew 7.6 percent year-on-year in October, up from the 5.5 percent growth in September.

Meanwhile, Wang said China still faces some difficulties and challenges in terms of restoring and expanding consumption.

"The post-COVID recovery in consumption is relatively slow, services consumption has not returned to pre-pandemic levels, consumer sentiment remains weak and there is still room for improvement in boosting spending power," she added.

Looking ahead, Zhou Maohua, an analyst at China Everbright Bank, said he expects to see a gradual pickup in domestic demand and consumption, saying more efforts should be made to create more jobs, improve people's incomes, encourage purchases of big-ticket items and optimize the consumption environment.

Despite the challenges and difficulties ahead, Han Wenxiu, an official with the Office of the Central Committee for Financial and Economic Affairs, said China possesses many advantages and enjoys several key opportunities, with opportunities outweighing challenges.

Han told an annual conference on the Chinese economy on Wednesday that China has plenty of room to step up fiscal and monetary policy support, as price levels are low and the central government's debt level is not high.

ouyangshijia@chinadaily.com.cn