Liu Tao, researcher at the Institute of Market Economy, Development Research Center of the State Council:


　　Three landmark changes will occur in the consumer market

　　In recent years, my country's super-large-scale market advantages have gradually emerged.

Middle-income groups and the new generation of young people have become the backbone of promoting consumption expansion and upgrading; the rapid development of various emerging technologies and the continuous expansion of application scenarios have strongly promoted the innovation and development of the consumer market.

　　In the coming period, especially the "14th Five-Year Plan" period, my country's consumer market will enter a new development stage of "from big to strong". Three landmark changes are expected to help accelerate the construction of a new development pattern.

　　First, the scale of the consumer market is expected to rank first in the world.

In 2019, my country's total retail sales of consumer goods exceeded 41 trillion yuan, close to the top ranked United States.

During the "14th Five-Year Plan" period, driven by the growth of household consumption, the total retail sales of consumer goods will continue to grow rapidly. This will provide a strong impetus for smoothing the domestic cycle and will also form a huge attraction for international goods and services.

　　Second, service consumption will become the mainstay of residents' consumption.

In 2019, the proportion of service consumption expenditure of Chinese residents has reached 45.9%, and it is expected that the proportion of service consumption will exceed 50% during the "14th Five-Year Plan" period. This will play an important guiding role in improving the adaptability of the relevant service supply system.

　　Third, the gap between urban and rural consumption is expected to continue to narrow.

In 2019, the gap in consumer spending between urban and rural residents has narrowed to 2.1 times.

With the accelerated development of agricultural and rural modernization during the "14th Five-Year Plan" period, it is expected that rural residents' consumption will continue to grow rapidly, and the gap with urban residents' consumption will further narrow.

　　The Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China proposed "to comprehensively promote consumption."

In specific work, we must focus on improving the relevant policy system based on the new changes that will appear in the consumer market.

　　First, it is necessary to increase the consumption power of residents, especially middle-income groups.

It is necessary to further strengthen the cultivation of digital literacy of urban and rural residents, promote higher quality and fuller employment, and improve the mechanism for the participation of knowledge, technology, management, data and other elements in the distribution.

At the same time, consider reducing the marginal tax rate of personal income tax.

　　Second, we must establish a diversified supply system that adapts to consumption upgrades.

Vigorously develop service consumption that not only meets the people’s quality of life improvement needs, but is also conducive to human capital accumulation, further relax the access restrictions in education, medical care, pensions, culture, sports and other fields, support social forces to increase the effective supply of related services, and promote Commodity consumption upgrades.

　　Third, it is necessary to improve a reliable, convenient and safe software and hardware environment.

In particular, it is necessary to strengthen the protection of consumer rights and interests, deepen the construction of the social credit system, actively deploy and build new infrastructure such as 5G, Internet of Things, and artificial intelligence, and improve the intelligence and network level of urban and rural consumer infrastructure, as well as the efficiency of supporting connections and utilization.

　　Finally, the basic system of market governance must be improved.

Promote the construction of a standard system and strengthen legal regulations in the new consumer sector.

At the same time, an inclusive, prudent, scientific, effective, fair and transparent online and offline integrated regulatory system must be established.

(Xiao Wei)