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Decline of Engel’s coefficient records China’s rise

(People's Daily Overseas New Media)    14:25, January 08, 2019

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China’s Engel’s coefficient, which measures the proportion of income spent on food, has dropped below 30% for the first time in history, gradually moving down from over 60% in the early years of reform and opening-up, recording the country’s unprecedented rise.

The Engel’s coefficient dropped to 29.3% in 2017 from 30.1 percent in 2016 and 33% around five years ago, according to the Ministry of Commerce in January 2018.

A lower index usually suggests a higher standard of living and an Engel’s coefficient below 30% places a country in the “wealthy” threshold outlined by the UN.

So is the case with China.

Back in 1978 when China’s reform and opening-up was first implemented, the country’s total retail sales of consumer goods nationwide was only 155.86 billion yuan ($22.75 billion). Many goods were determined by quotas due to the lack of consumption.

For example, meat, an ordinary food nowadays, was once so scarce that it required the use of quotas, making it a rare delicacy for families, usually only during the Spring Festival or other important occasions.

This limitation was gradually removed starting in 1984 and completely removed by 1992.

Since reform and opening-up, Chinese consumption has continuously been upgraded. The per capita consumption expenditure of urban residents increased from 5,350 yuan in 2001 to 24,445 yuan in 2017. And for rural residents, it grew on average at a rate of 7.4%, increasing from 1,803 yuan in 2001 to 10,955 yuan in 2017.

Also in 2017, total retail sales of consumer goods in China reached 366.262 billion yuan, a record high. Green products and electronics including smart wearables, robotic cleaners, and self-balancing scooters were especially favored by Chinese consumers. In particular, sales of new energy vehicles jumped 53.3% from a year ago to 777,000.

Just as President Xi Jinping said in December 2018, the country has kept improving the people’s lives and well-being over the past 40 years.

“The country has maintained its social stability over a long period, making it one of the countries that provide the greatest sense of safety in the world,” President Xi said at a gathering celebrating the 40th anniversary of the reform and opening-up on Dec. 18.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Jiang Jie, Bianji)

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