The flagship newspaper for the Chinese Communist Party (CCP) has highlighted the role of growth in consumption of services as a contributor to economic stability in the wake of a renewed round of Covid-19 lockdowns.
“The foundations for China’s economic recovery are still unstable, and there are still pronounced challenges such as insufficient demand,” wrote Wang Yiming (王一鸣) in an article entitled “Services Consumption is a New Engine for the Expansion of Consumption” (服务消费是扩大消费新引擎).
“We must strengthen the foundational role of consumption in economic recovery, conform to the new trend of upgrades in the consumption structure, and employ the leading role of services consumption in consumption expansion.
“Consumption is end demand, and is the final goal and motivation of production…President Xi Jinping has called for establishing an effective system for expanding domestic consumption, unleashing potential domestic demand, expanding household consumption, raising the level of consumption, and enabling the establishment of a super-large domestic market to become a sustainable historic process.”
In 2019 China’s per capita service consumption expenditures were close to 10,000 yuan, accounting for 45.9% of per capital services expenditures. This compares to a share of around 74% for advanced economies.
Wang highlighted the role that China’s digital economy would play in expediting growth in services consumption.
“The growth in services consumption and the rapid rise of the digital economy are conjoined…big data, 5G, artificial intelligence and other next generation digital technologies are rapidly penetrating the field of services consumption, enriching services consumption scenarios, improving the services consumption experience, and driving a revolution in services consumption.”