In the latest major economic data for the first three quarters, while major economic indicators such as exports and investment hit new highs during the year, we have also noticed that consumption as economic ballast and stabilizers is relatively lagging.
With the rapid recovery of exports and investment, consumption is the biggest variable in my country's economic growth, and it is also the most potential increase.
In this sense, stabilizing domestic demand and promoting consumption are still the top priorities of current work.
The economic growth rate turned positive for the first time during the year, the growth rate of fixed asset investment turned positive for the first time, and the total growth rate of imports and exports of goods turned positive for the first time... In the latest major economic data for the first three quarters, "positive" can be described as one of the most frequently occurring keywords. It not only reflects the strong momentum of the steady recovery of the Chinese economy, but also further strengthens the steady and long-term trend of the Chinese economy.
This hard-won transcript not only rejuvenated the weak world economy, but also won wide acclaim from international public opinion.
However, while major economic indicators such as exports and investment hit new highs during the year, we have also noticed that consumption as an economic ballast and stabilizer is relatively lagging, even dragging down economic growth.
The data shows that in the second quarter's 3.2% year-on-year GDP growth rate, investment contributed about 5 percentage points, net exports contributed 0.5 percentage points, but consumption dragged down 2.4 percentage points.
Even when the economy as a whole achieved positive growth in the first three quarters, the year-on-year growth rate of consumption was still -7.2%.
This has aroused many market participants’ concerns: Is the consumption-driven model of China’s economic growth still feasible?
Can China's super-large-scale market advantages be brought into play in the future?
To answer the above questions, we must first look at the reasons for the lag in consumption objectively.
Under normal circumstances, consumption can be divided into two categories: physical consumption and service consumption.
In terms of consumption data, under the impact of the new crown pneumonia epidemic, changes in my country's physical consumption have been roughly synchronized with economic fluctuations, but service consumption, which is more sensitive to epidemic prevention and control measures, has dropped significantly, becoming the most important factor leading to overall lag in consumption.
In other words, the speed of consumption recovery is largely constrained by the recovery process of service consumption.
It should be pointed out that it is also a global phenomenon that the recovery of service consumption lags behind physical consumption. Once the global epidemic is effectively controlled, service consumption will be fully released.
At the same time, in the process of consumption recovery, many new consumption formats and models that are more adapted to market demand have also emerged, which not only effectively hedged the impact of the epidemic, but also played a positive role in the restoration of domestic demand.
At present, my country has entered a new stage of normalization of epidemic prevention and control. With the rapid recovery of exports and investment, consumption is the largest variable in my country's economic growth, and it is also the most potential increase.
In this sense, stabilizing domestic demand and promoting consumption are still the top priorities of current work.
The key to unlocking consumption potential lies in deepening the reform of the income distribution system.
The pattern of income distribution determines the consumption level of the entire society. It is necessary to optimize and adjust the current income distribution structure in my country to make income distribution more inclined to residents, and to continuously increase the purchasing power of residents, especially those with low and middle incomes.
During the epidemic, various localities have explored ways to stabilize consumption by issuing consumer vouchers and increasing temporary price subsidies, which will have certain effects in the short term, but in the long run, it is still necessary to accelerate the construction of a long-term mechanism to increase the purchasing power of residents.
To unleash the potential of consumption, it is necessary to emphasize continuous efforts from the supply side.
Insufficiency of effective supply is one of the important factors affecting my country's consumption growth. It is necessary to continuously meet the upgrading needs of residents' consumption by improving the effective supply capacity and level.
For example, there are still some structural problems in the supply of education, pension, medical and other fields in my country. On the one hand, we need to deepen reforms to continuously break down the institutional barriers to development. On the other hand, we must also expand effective investment to accelerate the complement of consumption soft and hard. Shortcomings, while stabilizing consumption in key areas, continue to explore new growth points in consumption and promote the formation of a strong domestic market.
To release consumption potential, we must also vigorously promote the development of new types of consumption.
Recently, the State Council issued the "Opinions on Accelerating the Development of New Types of Consumption with New Business Forms and New Models", which clarified the development direction and policy measures of new types of consumption including online education, Internet health care, and new retail.
In fact, during the epidemic, the above-mentioned new business formats and new models have been widely recognized by the market and have become new consumption growth points.
Of course, the development of new consumption does not mean abandoning traditional consumption. It is necessary to strengthen overall coordination and policy linkage while continuing to expand and strengthen the traditional consumption format, and promote the accelerated integration of online and offline, and the synergy of new consumption and traditional consumption. To promote faster economic recovery and better growth.
What needs to be emphasized is that at present and for a period of time in the future, the mode of relying mainly on consumption to drive economic growth not only cannot be changed, but it must also do more in accelerating the construction of a new development pattern.
It is gratifying that, in response to the current blockage and pain points in the consumer sector, a new round of policy measures including encouraging the replacement of old cars, promoting the consumption of home appliances, and developing housing rental consumption are successively introduced and implemented, targeting the weak rural consumption. Digitization, standardization, and industrialization of the links have also been initiated.
We believe that a multi-level consumption pattern of cascading development, convergence and interaction, and complementary advantages will help the Chinese economy to move forward steadily on the path of high-quality development.
Gu Yang