The Chinese Academy of Social Sciences (CASS) recently issued the Blue Book on the Chinese economy, which highlighted the low consumption rate as an issue of concern. On the heels of the publication, the official media reported that Beijing has given orders to “improve the consumption system and mechanisms, and further stimulate the residents’ consumption potential.”
The Central Committee of the Chinese Communist Party and the State Council jointly handed out the “Opinion on improving the consumption mechanisms and further stimulating the consumption potential of residents.” It states that there are prominent institutional obstacles that restrict the expansion and upgrading of household consumption.
The opinion points out that key areas of the Chinese consumer market cannot meet the diversified demand from urban and rural residents effectively. The regulation authority has not adapted to the rapid development of the new modes of consumption. The quality standard system lags behind the need for escalated consumption quality and quantity. If the credit system and the consumer rights protection mechanisms do not play effective roles, the set of consumption policies cannot effectively support the rise in the residents’ consumption power.
As the CASS Blue Book reveals, China’s domestic consumption remains weak. The real growth rate of the per capita disposable income of the national residents in the first quarter of 2018 was 6.6 percent, far below the gross domestic product (GDP) growth rate. The urban and rural consumption expenditures as a percentage of disposable income hover at a low level of 63 percent.
Source: Central News Agency, September 20, 2018