Better help consumers do the heavy lifting

The scenario cannot be much better for China's investment growth as policymakers made it a top priority to address overcapacity in many industrial sectors and overstocks in the property market. Admittedly, stronger fiscal support and accommodating monetary policies may enable the country to arrest the slowdown in investment growth. But significantly accelerated investment growth is neither sustainable nor affordable to underpin China's long-term growth.

Hence, it is more than obvious that lawmakers and policymakers must do their best to help translate the rising potential of domestic consumption into the most important driving force of the Chinese economy.

After decades of steady growth in people's income levels, consumption has already become a major driver of growth. China's total retail sales crossed 30 trillion yuan in 2015, after reaching 20 trillion in 2012, ranking the second highest in the world. Besides, the average annual growth rate of retail sales reached 12.0 percent between 2013 and 2015, 3.8 percentage points higher than that of nominal GDP growth during the same period.

But that is only a harbinger of what may come when the number of middle-income consumers who can earn more than $1,000 a month is set to climb from about 10 percent of China's more than 1.3 billion population to, say, 20 or 30 percent. Such an expected increase in the number of middle-income consumers and their rising purchasing power will provide a reliable source of growth for not only the Chinese economy but also other economies.

For that to happen, however, lawmakers and policymakers have to take a hard look at their toolboxes and come up with legislative and administrative support for Chinese consumers to earn more and spend more. In this sense, more consumer-friendly legislation and government policies are badly needed.

The author is a senior writer with China Daily.

zhuqiwen@chinadaily.cm.cn