China will roll out an array of targeted measures to simultaneously boost consumption and deliver tangible benefits to the people after policymakers signaled a shift in prioritizing the expansion of domestic demand amid external uncertainties during a recent tone-setting meeting, officials and analysts said.
Their comments came after the annual Central Economic Work Conference in mid-December identified the “vigorous promotion of consumption” as the top priority on its policy agenda for the world’s second-largest economy in 2025.
Conditions and fundamental trends supporting China’s long-term positive economic trajectory have not changed, and the country’s consumer market will continue to exhibit a steady growth trend in the coming year, said He Yongqian, a spokeswoman for the Ministry of Commerce, on Thursday.
“Boosting consumption and enhancing people’s livelihoods will go hand-in-hand,” He said at a news conference, adding that more policy measures are in the pipeline to tap into the vast reservoir of untapped demand.
The ministry, along with other competent departments, will encompass a wider range of consumer products under the trade-in programs, allowing more households to participate in and benefit from the initiative, He said.
The trade-in policy has driven over 1 trillion yuan ($137 billion) in related product sales as of Dec 13, contributing to the sale of over 5.2 million passenger vehicles, as well as the purchase of more than 49 million units of household appliances, data from the ministry showed.
The evolving consumer preferences toward more sophisticated, energy-efficient, and technologically advanced products have created a perfect storm for trade-in programs to thrive, said Wen Bin, chief economist at China Minsheng Bank.
The first wave of growth for the trade-in policy has come from urban areas and consumers who are well-versed in the program. However, the real gold mine lies in rural markets, where the demand for household appliances and durable goods upgrades is equally strong, but has yet to be fully unleashed, Wen said.
In addition, China will adopt a suite of policy measures to promote the high-quality development of service consumption, He said.
“Consumers are increasingly gravitating toward services that provide emotional value and a sense of fulfillment, such as cultural, tourism, sports, and health and leisure activities,” said Chen Lifen, a researcher at the Development Research Center of the State Council.
Data from the first three quarters of the year underscore this trend, with per capita service consumption among Chinese residents growing 7.6 percent year-on-year, outpacing the 2 percentage point increase in overall per capita consumer spending, according to the National Bureau of Statistics.
Furthermore, the share of service consumption expenditure in total household consumption has risen by 0.9 percentage point compared to the same period last year, now accounting for 47 percent of total consumer spending, the NBS said.
Looking ahead, dedicated efforts should be made to slash the negative list for foreign investment access in areas such as telecommunications, the internet and healthcare, creating opportunities for international players to contribute to the diversification and upgrade of service offerings, Chen added.
wangkeju@trulynews.cn