Why should we pay special attention to the development of consumption at present?
First, this is the need to create an international and domestic double cycle economic pattern with the domestic market as the main body. The double cycle economic pattern is not a passive choice for China to cope with the changes of external environment in the short term, but a strategic reorientation actively promoted in the medium and long term. It is the road map of Chinas overall economic layout in the next 20 to 30 years. The double cycle economic pattern should first of all create a good internal circulation with domestic market as the main body, which depends on the domestic consumption of 400 million middle class and the vast rural market.
Second, the supply side reform urgently needs to change the mode of three to one reduction and one subsidy to accelerate the improvement of Chinas overall consumption level. The report of the 19th National Congress of the Communist Party of China pointed out that the main social contradictions in China have been transformed into the contradiction between the peoples growing needs for a better life and unbalanced and inadequate development, which requires us to vigorously improve the quality and efficiency of economic development on the basis of continuing to promote development, so as to better meet the growing consumption demand of the people.
Why can the Yangtze River Delta lead the national consumer market?
In 2019, Chinas total retail sales of consumer goods reached 41.2 trillion yuan, exceeding 40 trillion yuan for the first time, further narrowing the gap with the United States. Among them, the total retail sales of consumer goods in the Yangtze River Delta region accounts for more than one third of the country. Why can the Yangtze River Delta lead the national consumer market?
First, in the first half of this year, the Yangtze River Delta accounted for four of the top ten consumption cities in China, namely Shanghai, Suzhou, Nanjing and Hangzhou. In the first half of the year, the total retail sales of consumer goods in Shanghai, the city of consumption champion, reached 694.676 billion yuan. Although it was 11.2% lower than that of the same period last year, the decline rate was significantly narrowed by 9.2% compared with the first quarter. The growth rate of consumption in May turned from negative to positive, and continued to increase in June. Nanjing ranked eighth, but its permanent resident population was less than 10 million, with a population of 8.5 million. The total consumption in the first half of the year was 326 billion yuan, but the per capita consumption was the highest, reaching 38300 yuan.
Second, judging from the overall consumption situation of each province, the total retail sales of consumer goods in Jiangsu Province reached 1691.04 billion yuan in the first half of the year, surpassing Shenzhen and ranking second in the country. The enlightenment brought by this change is very important. Although Shenzhens economic growth rate has ranked first in China and third in foreign trade for many years, the high consumption caused by high housing prices has led to a continuous decline in Shenzhens consumer market, which may fall out of the top 10 in the national consumer market in the future. This is because it is unsustainable to stimulate the economy in any region under the condition of high housing prices. Although there are 8 million migrant population in Shenzhen, there is a situation that migrant workers cant afford to rent houses, which cant fundamentally improve the consumption level. The key to consumption in a region lies in the service level and quality, and the driving force of consumption is to spend and use it. For example, the consumption in the Yangtze River Delta region can only be expanded by upgrading the basic living needs of the people. Take Jiangsus breakfast as an example. There are dozens of varieties of breakfast in this area, including soup dumplings, pot stickers, sugar porridge lotus root, Gai Doumian, dim sum, Shaobing, old stewed eggs, etc., while some areas are basically old three (pancakes, fried dough sticks and soybean milk).
Third, we can compare the development of time-honored brands in different regions. Laozhengxing has a history of nearly 100 years. Its stores in the Yangtze River Delta are not expensive and of good quality. They are overcrowded upstairs and downstairs. However, some time-honored brands in the north, such as Goubuli and Quanjude, did not take ordinary consumers as service objects and did not upgrade on the basis of common peoples consumption, resulting in the continuous decline of business income, and the people in these areas have consumption ability and consumption space.
Not only is the catering industry in the Yangtze River Delta region the number of cinemas and gyms in the region is in the forefront of the country, which well meets the consumption needs of local people. In addition, Shanghai has the most developed convenience store system and the largest number of convenience stores in China. For the eco-tourism industry emphasized by President Xi Jinping many times, in recent years, the Yangtze River Delta region has established a tourism market mainly based on ecological environment and domestic market demand, with characteristic towns all over the Yangtze River Delta.
There is another phenomenon that can explain a lot of things. The third China International Import Expo is about to open in Shanghai. According to my understanding from the organizing committee, Jiangsu and Zhejiang provinces and cities are required to buy the most imported goods. Suzhou has sent more than 300 delegation. The promotion of consumption in these areas can be reflected in the import aspect.
From the above comparison, we can see that in order to improve consumption, we should first solve the worries of the common people in terms of housing, education, medical care and other aspects. Where the solution is better, where there is consumption, we can fundamentally improve the peoples consumption desire and demand.
How to do a good job in internal circulation and improve the domestic consumption market?
Due to the impact of this years epidemic, travel abroad has been greatly reduced, so that tourism shopping in Hainan has doubled. It can be seen that there is still a lot of room for development in domestic consumption demand. In the future, in addition to improving consumption from the supply side reform, we can also promote consumption from the demand side. We should do a good job in several aspects
1. We should improve the political position and enhance the consumer market according to the strategic deployment of the central double cycle economic pattern. The report of the 19th National Congress of the Communist Party of China proposed that the market should play a decisive role in the allocation of resources and the government should play a better role. Many local governments emphasize the role of the market and forget to let the government play a better role. If governments at all levels play a role in promoting the consumption market and combine with market regulation, more and more cities will realize consumption upgrading. The promotion of urban consumer groups can create a good internal circulation of Chinas economy.
2. In many places, the real flow of personnel has not been realized. The flow of personnel is not only related to capital flow, logistics and information flow, but also related to consumption expenditure. When promoting the resumption of work and production, the government should also promote the resumption of business and market, and introduce more accurate and effective assistance measures to actively help enterprises resume operation, promote the normal operation of catering and other life service industries and stimulate consumption.
3. Efforts should be made to cultivate online consumption and open up a broader consumption space. In recent years, Chinas mobile Internet has been widely used, and online payment and mobile payment have entered thousands of households. Online consumption is not only easy for young people, but also many middle-aged and elderly people have learned to order goods and services online during the period of epidemic prevention and control. The formation of new consumption habits, from simple offline traditional consumption to online and offline coexistence of multiple choices, the dimension of consumption continues to expand, which can greatly extend the consumption space.
On the whole, I am still confident that China will achieve its economic goals this year. With consumption upgrading in various cities, Chinas consumption will break out in the fourth quarter. The annual consumption is expected to continue to exceed 40 trillion or even 45 trillion peoples dollars, exceeding the total consumption of the United States.
This article is the exclusive contribution of Netease Research Bureau and does not constitute investment decision.
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