Recent data has clearly indicated slowness in the Chinese economy and the government there is undertaking measures to increase domestic consumption and viewing that as a key cure to spruce up the flagging economy this year.
The state planer of the country said on Wednesday at the sidelines of its annual parliamentary session that there is untapped potential in a huge consumer market because of the increasing per capita purchasing power among the 1.4 billion Chinese citizens and the fast rate of urbanization.
For six consecutive years, the main driver for the economic growth of China has been domestic consumption and this component accounted for about 76 per cent of the total gross domestic product (GDP) of the country in 2018.
Last year, there was growth of 9 per cent in the total retail sales even though that rate of growth is a bit slower than what was achieved by the country in the previous year.
There is wide spread expectations that the average GDP growth for the Chinese economy would slow down to lower than 6.5 per cent for 2018 and hence for the current year, the Chinese government has taken up a strategy of encouraging increased consumption to boost up the economy. Ning Jizhe, vice head of the National Development and Reform Commission said that the focus of the strategy is to increase consumer spending in new energy vehicles – including hybrid and electric ones, household appliance purchasing and tourism.
The government also wanted to spread the reach and availability of e-commerce especially for consumers in the rural areas.
The government also has noted that under catering of the childcare services and that is the reason that the government plans to enhance the number of beds at elderly-care facilities in the next three to five years, said the economic planner. The focus of the Chinese government would also be on further strengthening of protection of consumer rights and a further crack down on fake or shoddy products by increasing the applicable penalties.
On the other hand, Chinese Premier Li Keqiang the Chinese economy is facing acute challenges because of a transformation in its economy during his delivery of the government work report to the annual legislative session on Tuesday.
“Looking back at the past year, we can see that our achievements did not come easily,” said Li at the opening meeting of the second annual session of the 13th National People’s Congress.
“An interlacing of old and new issues and a combination of cyclical and structural problems brought changes in what was a generally stable economic performance, some of which caused concern,” he added.
In 2018, a profound change in its external environment was also faced by China, Li said.
The premier said that Production and business operations of some companies have been adversely affected – in addition to the market expectations, especially because of the acrimonious trade war between the United States and China, compounded by some setbacks in economic globalization, constriction in multilateralism and multiple shocks in the international financial market.
(Adapted from TheStraitsTimes.com)