China.org.cn | May 28, 2020
CCTV:
Economic statistics from the first quarter of 2020 show that consumption recovery has generally been comparatively slow. Therefore, many people online have spoken of their desire to indulge in "retaliatory consumption" after the epidemic situation improves. However, in the meantime, statistics from China's central bank also show an increase in deposits during the first quarter. Some people have therefore said that "retaliatory saving" is taking place. So, what exactly is happening? is it "retaliatory consumption" or "retaliatory saving"? How does the NDRC evaluate the epidemic's impact on consumption? What measures will be introduced next to boost consumption? Thank you.
Ning Jizhe:
That is a good question, and one which is of great concern to people both in China and overseas. As you've said, the COVID-19 pandemic has had a huge impact on the economy, primarily affecting consumption sectors. People's aggregate, liquidity, and contact consumption behaviors, as well as the consumption of non-essentials, have been affected. In the meantime, we should also note that new consumption models are expanding, such as online consumption and e-commerce. These have ensured the basic needs of 1.4 billion people, and contributed to the resumption of work and production of companies.
China's retail sales of consumer goods dropped 7.5% in April year-on-year, the decline of which narrowed by 8.3 percentage points from March. This also indicates that as the economy continues to recover and work and production resume, the general trend of expansion and structural upgrading of China's consumption remain unchanged. We believe that consumption data for May will be better. As for whether this is "retaliatory consumption," that is not necessarily correct. Consumption is certainly moving towards recovery. Next, the NDRC will follow the requirements set out in the Report on the Work of the Government, adopting multiple measures to help consumption recover.
First, the NDRC will make greater efforts to promote the optimization and upgrading of commodity consumption mainly concerning people's everyday lives. In terms of diets, the NDRC should ensure people are not only well-fed, but also eating in a healthy manner. As for clothing, the NDRC should work to ensure that people can dress both warmly and decently. In terms of items people use, the NDRC should work to ensure that things provided to people are not only useful, but also diverse and of high-quality. The housing and rental markets need to be further developed. Greater efforts need to be made to renovate the city's old neighborhoods in a more convenient and age-friendly way, so that residents can live comfortably. The NDRC will further promote the optimization and upgrading of car consumption, as well as the circulation of second-hand vehicles. It will work to implement favorable policies concerning fiscal and taxation support regarding the purchase of new energy vehicles (NEVs), so as to make traveling easier for people. In the meantime, the NDRC will comply with the trend of people's consumption being upgraded, strengthening the development and supervision efforts of commodity brands, quality, and manufacturing standards, so as to continuously optimize people's consumption environment and improve the level of consumption.
Second, the NDRC will work to improve the quality and scale of consumption-related services in a comprehensive manner. Considering the progress of supply-side reforms in the service industry, the NDRC will release the potential in consumption-related services at an accelerated pace, such as those in the culture, tourism, sports, elderly care, child care, housekeeping, education and training sectors. It will work to diversify the supply of cultural and tourism products, improving the quality of tourism in China and promoting the development and prosperity of China's cultural undertakings and culture industry. The NDRC will also make greater efforts to boost sports-related consumption, making fitness programs and sports-watching activities accessible to all. Currently, 400 million people exercise daily in China. If this figure reaches 800 million, then the sports market will double. The NDRC will work to improve effective supplies for elderly care services, supporting private sectors in making affordable child care services accessible to all. It will carry out the "leading" campaign to improve the quality and scale of housekeeping services. The NDRC will promote integration between industries and schools, supporting private sectors in launching educational and training programs.
Third, we will boost new forms of consumption, including digital consumption, online consumption and information consumption. From January to April of this year, online retail sales of physical goods increased nationally by 8.6% year-on-year, accounting for 24.1% of the total retail sales of consumer goods — which increased by 5.5 percentage points year-on-year — and showing the strength of new forms of consumption. We must take the opportunity to further promote the integration of online and offline consumption and advance the digital upgrading and transformation of traditional in-store consumption. We will innovate non-contact and reduced-contact consumption patterns and explore the new retail models, such as smart supermarkets, stores and restaurants. We will vigorously develop the "internet plus social service" consumption model and expand forms of online consumption, such as online education, telemedicine and online entertainment. We will actively develop new information products, such as mid- to high-end mobile communication terminals, wearable devices and ultra-high-definition video terminals, to promote the upgrading of information consumption.
Fourth, we will actively expand green, healthy, energy-saving and environment-friendly consumption. Guided by green development, we will promote the production, supply and consumption of green, organic ecological and agricultural products. We will step up the improvement of the recycling network to facilitate resource recycling and promote the upgrading of motor vehicles, home appliances and electronic products. For some idle home appliances and electronic products, we can recycle them as a contribution to consumption upgrading. We will optimize the standard system of industrial energy saving and green manufacturing, and promote the application of green and energy-saving products. While responding to the COVID-19 epidemic, we will call for all of society to develop a rational concept of consumption and a healthy lifestyle, and encourage families to keep medical kits that include masks in reserve. Our nation is home to more than 400 million families, and everyone should develop the awareness and habit of storing up medical supplies. We will integrate and optimize medical and health resources and relevant supply chains, and improve the health industry system to expand health services consumption.
Fifth, we will strengthen the infrastructure and service systems of consumption. We will accelerate the construction of new infrastructure that can support 5G networks, data centers, industrial internet, the Internet of Things, etc. We will improve the urban and rural logistics distribution system and promote resource sharing and the construction of smart parcel delivery lockers and other facilities. We will optimize the consumer network, turn more cities into international consumption centers and build a number of regional centers equipped with advantages in resource integration that can drive consumption. We will promote the construction of urban and rural commercial outlets and optimize the planning and distribution of commercial retail enterprises; this will include developing the small business economy and the night economy. These are all promising areas. Thank you.