China to promote industrial and consumption upgrading for high-quality economic development

The annual Central Economic Work Conference held this December in Beijing called for concerted efforts and synergetic effects of China’s fiscal and monetary policies and policies on consumption, investment, employment, industries, and regional development so as to promote industrial and consumption upgrading.

Visitors are seen in Hongyadong scenic spot at night in Yuzhong District, southwest China's Chongqing Municipality, Sept. 9, 2019.  (Xinhua/Tang Yi)

“Industrial and consumption upgrading helps further facilitate connectivity among various links in economic development. Consumption is now the major driving force for economic growth. While the ever-growing pace of consumption upgrading generates new growth points, there are certain shortcomings in the supply side,” said Zhao Ping, director of the international trade research department of the Academy of China Council for the Promotion of International Trade.

During the first 11 months of this year, China’s total retail sales of consumer goods exceeded 37 trillion yuan (about $5.28 trillion), up 8 percent year on year. Consumption contributed as much as 60.5 percent to China’s economic growth in the first three quarters this year.

As consumption plays a significant part in the country’s economic growth, imbalance between consumer demand and supply has become a prominent problem in China.

Industry development in China is barely meeting the needs of consumption upgrading, said Dong Chao, director of the institute of circulation and consumption of the Chinese Academy of International Trade and Economic Cooperation.

Insufficient investment in research and development of consumer goods technologies has caused market supply to lag behind demand, and the domestic market faces a serious problem of redundant construction in infrastructure and some heavy chemical fields and decline in investment benefits and market operational efficiency, explained Dong.

“Promoting industrial and consumption upgrading will not only help comprehensively leverage market advantages to promote high-quality economic development against the backdrop of rising global trade protectionism, but also facilitate people’s need for consumption upgrading, thus creating better lives for people,” Dong added.

In order to realize industrial and consumption upgrading, China needs to increase people’s incomes and improve the institutional environment for consumption so as to constantly foster new highlights of consumption and further boost consumption’s fundamental role in promoting economic growth, said Zhao.

As for the supply side, China should aim its efforts at new trends in consumption, and rectify drawbacks through industrial innovation, thus driving forward industrial upgrading while promoting consumption upgrading, Zhao noted.

“Industrial upgrading and consumption upgrading are each other’s premise and support each other’s development,” said Zhao, explaining that the proposal for industrial and consumption upgrading means that high-quality development of the Chinese economy requires coordinated growth of market supply and demand under the framework of supply-side structural reform.

The Central Economic Work Conference has made it clear that China will roll out a series of policies and measures to create a sound environment, according to Zhao, adding that China will create the necessary conditions for industrial and consumption upgrading and development by reducing taxes and fees and improving infrastructure and relevant environment, and provide necessary financial support for industrial development via financial services including fund-raising.