Full transcript of policy briefing of the State Council on Jan 16, 2015

Ta Kung Pao:

Judging from the economic figures in the first three quarters of last year, consumption was the strongest driver of economic growth. Just now, the two ministers also mentioned that there was great potential in the domestic market. Could you explain what the government will do to further unleash consumer potential?

Zhu Zhixin:

I will try to answer your question first.

I have mentioned the fundamental role "the three engines" should play. We believe that consumption is vital to China's economic growth in 2015. In short, consumption is decisions made by numerous consumers as individuals. As consumption rises, the patterns of consumption will be more and more individualized. The phenomenon of people imitating others and making similar consumption decisions is fading.

From the perspective of policy-making, I believe we must adapt to changing demand when studying consumption. Maybe you remember the "new three items" (television, refrigerator and washing machine, the three items that the Chinese people in the 1980s asked for as a precondition for marriage) and other similar notions. Such notions reflect that people made similar consumption decisions. Now we need to think about how to make consumption more diverse and more individualized. Of course, we also need to think about how to encourage daily consumption, such as food and clothing.

In 2015, we can make efforts in six fields of consumption.

First is increasing people's income. To increase income, it is most critical to create more jobs. With more jobs and more income, we can encourage more consumption. Of course, we need to further reform the income distribution system. In short, people are able to spend only when they have enough money.

Second, we need to improve the social security system. It's important to improve consumer expectations so people will spend without fear. We need to improve social welfare and upgrade the social aid system, and provide more public services. In a word, we need to dare people to spend.

Zhu Zhixin:

Third, we need to improve the consumption environment. We should lift the people's willingness to spend. This willingness centers mainly around the development of the distribution system and relevant facilities, and the improvement of policies concerning consumption.

Actually it's about standardizing the order, building the right environment and protecting consumer rights and interests, and finally, shaping a convenient, safe and reassuring environment which makes people willing to spend. From being capable to consume, to dare to consume and willing to consume, it is a very good chain.

Fourth, we need to find the hotpots for consumption for the current phase. For instance, the Double 11 Day (on Nov 11, famous for online sales), netted 35 billion yuan in 2013 and 57 billion yuan in 2014. I have been studying the economy, and worked on the statistics. What does 57 billion yuan mean? It means that there will be hundreds of millions of yuan spent every minute, and tens of millions of consumers are online in every second. How big is the market and what kind of demand is prevalent in our consumption environment? In another instance, film industry box office takings exceeded 30 billion yuan last year. This has also been a very important factor in driving economic growth, not to mention popcorn sales!