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Consumption contributes 64.6 percent to economic growth in 2016

Updated: Feb 21,2017 3:11 PM

Consumption contributed to 64.6 percent of China’s economic growth in 2016, up 4.9 percentage points compared with the year before, said Chinese Minister of Commerce on Feb 21.

Gao Hucheng, Minister of Commerce, said consumption has become the most important boost in the Chinese economy since 2014, which indicates that the country’s economic structure has been undergoing historic changes.

Meanwhile, new characteristics have shown up in Chinese people’s consumption. Demands for high-quality, multifunction and intelligent products have been increasing, said Gao. For instance, the sales volume of vehicles has exceeded 28 million, seeing a 13.7 percent year-on-year growth. Sales of SUVs under various brands have increased by 44.6 percent, added the minister.

The e-commerce development is booming in China. The 2016 online turnover has increased by 25.6 percent, accounting for 12.6 percent of the total turnover of the social consumption. “It is hard to imagine how the distribution industry would be like without the internet plus,” said Gao.

More trends have also shown up in the consumption. For example, service consumption has taken a larger portion in the total consumption, and consumers have shifted to purchase personalized and customized commodities. A greener trend is on the rise in people’s consumption concept as well.

Gao also briefed the media about China’s foreign trade in the past year.

China’s foreign trade showed a more stabilized tendency, with the total foreign trade volume stood at 24.3 trillion yuan ($3.69 trillion), down 0.9 percent year-on- year. The decreasing amplitude has narrowed by 6.1 percentage points, according to the minister.

Gao said the actual amount of foreign investment used by China totaled 813.2 billion yuan ($126 billion), growing by 4.1 percent. Under the background of a 13 percent drop in the global transnational direct investment (TDI), the figure has already proven that the global capital has enough confidence in the Chinese economy.

He denounced foreign reports of a retreating tide of foreign capitals from China, saying that as some products leaving the country, many high-end industries have been pouring in. It is the result of market playing the crucial part in the resource allocation, added Gao.

The minister also highlighted China’s policy in encouraging foreign investment in 2017, such as reducing entry limits, promoting the free-trade-zone mode across the country, and creating a more equitable, transparent and predictable economic environment.

Gao said, in 2016, distribution’s influence in boosting consumption and reducing costs were obvious. The total retail sales stood at 33.2 trillion yuan ($4.82 trillion) in 2016, up 10.4 percent year-on-year. The value added by distribution has reached 9.6 trillion yuan ($1.39 trillion).

Online retail sales is 5.2 trillion yuan ($760 billion), seeing a year-on-year increase of 26.2 percent.

Gao said the Ministry of Commerce mainly focused their work in three sectors during the past year, including promoting the supply-side reform in business, implementing the open-door policy under the Belt and Road Initiative, as well as deepening reform in the significant industries, such as the construction of free trade zones.

The ministry will continue to promote the upgrade of consumption, stabilize foreign trade and instructing the development of foreign investment in 2017, said the minister.