By Chen Changsheng, Xu Wei, Lan Zongming & Li Chengjian, Department of Macroeconomic Research, DRC

Research Report, No.177, 2021 (Total 6242) 2021-6-29

Abstract: In light of the long-term consumption performance across the world, the relation between macro- and micro-consumption trends and the economic development level has presented a “U-shaped” curve. At present, China’s macro-consumption begins to go upward while its consumption at micro-level still undergoes a downward trend towards stabilization. Economic development is still playing the decisive role in influencing consumption tendency, and the stabilization of China’s consumption tendency will be further consolidated in the 14th Five-Year Plan period. The low consumption level is related with the following factors. The major reason is due to people’s low income and wide income distribution gap, which have constrained the enhancement of consumption tendency; the in-depth reason is pertinent to population-aging and low fertility rate, leading to the fact that the population is getting old before getting rich. Besides, the public services and social security system are inappropriate which have made the consumption room become smaller. In the 14th Five-Year Plan period, with the continuous economic and social development and improvement of residential income, together with the refinement of the consumption environment, income distribution mechanism and social security system, it is expected that the downward consumption trend at the micro-level will be reversed and become stabilized.

Keywords: consumption trend, U-shaped pattern, macro- and micro-level; reverse the downward trend and get stabilized