Firing up consumption on all cylinders

At the Central Economic Work Conference held on Dec 15 and 16, it was pointed out that the Chinese economy faces quite high pressure, but with its strong potential and vitality, the economy is expected to generally recover in the coming year.

Domestic consumption has suffered as a result of the pandemic in 2022. Data show that sales of construction and decoration materials dropped by 10 percent, while sales of home appliances declined by 17.3 percent, both of which are typical examples of consumption affected by the pandemic.

But it is equally true that implies there is huge pent-up potential for consumption growth in 2023. For 11 successive years, consumption has accounted for over 50 percent of the GDP, and it has been an essential engine of economic development.

On Dec 14, the central leadership published a guiding document on boosting personalized, diversified, high-quality consumption demand. And the Central Economic Work Conference, which opened one day later, also prioritized the recovery and enlargement of consumption as a priority task.

That should include fast recovery of the sectors heavily hit by the pandemic, such as entertainment, hospitality, tourism, catering, aviation and sport, all of which have suffered heavily during the pandemic. It is advisable to set up special funds and issue low-interest loans to help enterprises in these sectors recover.

Other consumption sectors also need special attention. For example, property consumption is an essential pivot of the domestic demand expansion strategy, and bank loans plus financing support are needed to help revive the market. Added together with the optimization of real estate policies, people's desire to buy housing will reemerge.

Regions can also tailor their policies to boost consumption. International consumption centers can be cultivated, while a group of regional consumption centers can be supported, too, so as to help cities upgrade their consumption. Consumption habits can also be cultivated in rural regions so as boost the potential of the farming population.

In one word, consumption is an essential engine of the economy and it is time to get that engine running well.