The Ministry of Commerce (MOFCOM) has called for greater efforts to expand domestic demand and the contribution made by consumption to economic growth in the immediate wake of the 20th National Chinese Communist Party (CCP) Congress.
At a party meeting held on 24 October, MOFCOM head and party secretary Wang Tao (文涛) called for “endeavouring to expand domestic demand, strengthening the fundamental role of consumption in economic growth, and strengthening the vitality and reliability of major domestic circulation.”
Wang’s remarks arrive as Chinese consumption levels take a hit from the ongoing impacts of the country’s Zero Covid policy, after posting many years of sustained growth.
Ming Ming (明明), chief economist with CITIC Securities, said that prior to the pandemic consumption expenditures had in recent years made a contribution of over 60% to Chinese GDP, emerging as a key driver and “ballast stone” for economic growth.
At present, however, due to the impact of the pandemic on employment and household incomes, the recovery of consumption has remained slow.
Figures from the National Burea of Statistics indicate that consumer good retail sales in China stood at 32.0305 trillion yuan for the first three quarters of 2022, for year-on-year (YoY) growth of 0.7%. This included a decline of 4.6% in the second quarter, following the imposition of a renewed round of Covid lockdowns, followed by 3.5% growth in the third quarter.
In 2022 Chinese authorities have unveiled a series of policies to spur consumption, covering areas including automobiles and households. Key measures have included the issuance of consumption vouchers and the provision of financial support and rent reductions to enterprises in sectors such as food and beverage.