BEIJING -- The Chinese government announced measures to boost and upgrade domestic consumption in a bid to raise the quality and efficiency of its economy on Oct 29.
Consumption is an important “engine” for economic growth and represents great potential for China’s development, said a statement on the central government’s website following an executive meeting of the State Council presided over by Premier Li Keqiang.
“Among the driving forces for growth, consumption demand has the largest scale and the closest bearing on people’s livelihood,” the statement said.
The country must make full use of all market forces to raise effective supply and promote the expansion and upgrading of domestic consumption, which will in turn push forward growth of new industries and raise the economic growth to a higher level.
“China needs to raise people’s incomes to make them capable of consumption,” the statement said.
The country will roll out supporting measures and detailed policies for deepening its income distribution reform, raise farmers’ incomes through diversified means and ensure that residential incomes grow at the same pace as the country’s economy.
It will also improve the social security network to free people from saving pressure and build a better consumption environment to make people willing to spend.
The statement pinpointed some major fields for boosting consumption, including information-related products (such as mobile Internet), green and energy-saving products, housing, tourism and leisure, education, as well as elderly care.
Zhang Zhanbin, an expert at the Chinese Academy of Governance, said China’s economy is currently entering a “new normal” as the growth pace slows down.
Data from the National Bureau of Statistics showed that China’s economy expanded by 7.4 percent year-on-year to reach 42 trillion yuan in the first nine months of 2014.
The pace was within the government-set range of around 7.5 percent for the whole year, but was much lower than a growth of about 10 percent seen between 1979 and 2012.
“Under the new normal, China should pay more attention to strengthening the pivotal role of domestic demand in driving economic growth,” Zhang said.
The government has made it clear on many occasions that expanding domestic consumption should be the major impetus for growth and also a significant aspect of economic restructuring.
In recent years, China has strived to steer away from over-reliance on demands from trade and investment. In the first three quarters, consumption’s contribution to GDP growth stood at 48.5 percent, compared with 41.3 percent from investment and 10.2 percent from trade.
“Economic growth rate is now not as important as it was in the past. It’s time for China to pursue growth that will offer tangible benefits for the people, instead of just growth figures,” said Zhang Chewei, expert with the Chinese Academy of Social Sciences, commenting on the government’s moves to raise people’s incomes.
The executive meeting on Oct 29 also decided to open the bank-card clearing business to both domestic and foreign investors in an effort to expand the opening up in financial sector and optimize consumption environment.
Meanwhile, China will push forward the development of charity causes and guide social forces to engage in charity endeavors, the State Council said.