China will maintain strong growth in consumption this year with deepening supply-side structural reform, Commerce Minister Gao Hucheng said on Feb 21.
The trend will persist between 2016 and 2020 and feature more online retail sales and consumption of more quality goods and services, he said at a news conference, citing stellar growth in these sectors.
Retail sales, a key indicator of consumption, have been growing at double-digit rates annually for years, he said, adding e-commerce has facilitated the spike in consumption.
The volume of online retail sales rose 26.2 percent to hit 5.2 trillion yuan ($755.3 billion) in 2016 over the previous year, he said.
Consumption is shifting gears with Chinese consumers buying more expensive and premium products.
Over 28 million automobiles were sold in China last year, up 13.7 percent year on year, while new-energy vehicles posted growth of 53 percent, he said.
Consumption of services is growing faster than that of goods thanks to rapid expansion in sectors such as catering, housekeeping and care, he added.
Consumption has become the primary driver of China’s economy since 2014, contributing 64.6 percent to China’s GDP growth in 2016, up 4.9 percentage points than in 2015, Gao said.
The ongoing supply-side reform will narrow the discrepancy between the supply of goods and services and shifting market demands, unlocking more potential.
Retail sales of consumer goods are expected to jump by 10.2 percent year on year to exceed 37 trillion yuan in 2017, contributing more than 70 percent of the country’s economic growth, according to an earlier report issued by the China General Chamber of Commerce.
In 2017, China will forge ahead with the supply-side structural reform by improving the supply structure and consumption environment, the minister said.