A view of Wuxi. [Photo/Wuxi Daily]
Consumption: New document aims to further unleash potential
China announced a raft of measures on Monday to boost consumption, such as stimulating purchases of new energy vehicles and services, as part of a package of measures to bolster domestic demand and shore up the world's second-largest economy, said officials and experts.
However, they warned that the broader economy is still facing headwinds and pressures from lackluster demand and a complicated external environment, highlighting the necessity for stepped-up countercyclical policy adjustment.
Looking at the second half of the year, they felt the focus will be on expanding domestic demand and boosting market confidence. They said the economy will gradually stabilize and improve with a package of stimulus policies in the offing to revive the recovery momentum.
The State Council General Office on Monday released a document that details a total of 20 measures to restore and expand consumption. The measures include easing restrictions on car purchases, supporting people's demand for buying their first homes as well as the demand for upgraded housing, boosting consumption of home improvement and spurring consumption in cultural tourism during the holidays.
Li Chunlin, deputy head of the National Development and Reform Commission, said promoting consumption is the key to restoring and expanding domestic demand. It is closely related to better meeting people's demand for a better life and crucial for consolidating the foundation of economic recovery.
He told a news conference held on Monday in Beijing that the new document aims to further meet residents' consumption needs and unleash consumption potential through policy and institutional optimization.
According to Li, the recovery in some consumption sectors is not yet solid and consumer confidence is not strong, highlighting the need for stepped-up policy support.
Retail sales, a key measurement of consumer spending, grew by 3.1 percent year-on-year in June, down from the 12.7 percent growth in May.
Li said the country will study and improve more supportive policies to better meet people's diverse demand in car consumption. More efforts will also be made to promote rural consumption and strengthen support for those unable to find jobs.
To further boost consumption of electronic products, He Yaqiong, head of consumer goods and industry at the Ministry of Industry and Information Technology, said the ministry will accelerate the process of formulation of the document on promoting the high-quality development of the electronic audiovisual industry.
Miao Muyang, director-general of the department of industrial development in the Ministry of Culture and Tourism, said the ministry will study and formulate a raft of policy measures to further unleash the potential of tourism consumption.
Data released by the National Bureau of Statistics on Monday showed the latest official snapshot of the pressures facing the economy, with the official purchasing managers' index for China's manufacturing sector remaining in the contraction zone for the fourth consecutive month, albeit ticking up to 49.3 in July from 49 in June.
Meanwhile, China's non-manufacturing PMI came in at 51.5 in July, down from 53.2 a month earlier, NBS data showed.
Zhou Maohua, an analyst at China Everbright Bank, said the latest figures point to strains on the manufacturing sector amid still-weak demand, calling for more efforts to expand effective demand, boost consumer confidence and increase the support for weak links in the real economy and key emerging fields.
Wen Bin, chief economist at China Minsheng Bank, said the broader economy still faces mounting pressures, calling for stepped-up countercyclical policy adjustments to shore up the economy. He expected the quarter-on-quarter GDP growth to accelerate in the third quarter.
The NDRC told Xinhua News Agency on Monday that it will enhance countercyclical adjustments, prepare policy reserves, and promptly introduce targeted and more forceful policy measures in response to changing situations.
Looking into the second half of the year, the NDRC said it will further expand domestic demand and boost consumption, with a key focus being increasing residents' incomes via promoting employment, boosting consumption of big-ticket products, expanding holiday spending as well as studying and introducing policy measures to develop the silver-haired economy.
The NDRC also stressed in the meeting held on Sunday that it will step up macroeconomic policy adjustments, promote the recovery in consumption of big-ticket products, boost growth in services consumption and stimulate the vitality of private investment.
