ThePaper.cn:

How would you assess April's consumption figures? What are the characteristics of consumption pattern? How has consumption recovered this year? Thank you.

Fu Linghui:

Thank you for your questions. I will take this one. Consumption is also an area of great concern to everyone. Since the beginning of this year, the special campaign to boost consumption has been implemented. New growth areas in consumption have been cultivated at an accelerated pace, and market sales have continued to expand. From what we saw in April, the growth rate of retail sales of goods slowed down due to factors like the high base of comparison compared to the same period last year. However, when considering the overall situation of retail sales of both goods and services, the trend of steady consumption growth has not changed. Retail sales growth of services has accelerated, retail sales of some upgraded goods have grown rapidly, and new types of consumption developed and expanded. Preliminary estimates indicate that total retail sales of consumer goods and services increased by 3.2% year-on-year from January to April, remaining generally stable compared to the first quarter. In analyzing consuming trends, we should not only focus on goods consumption, but also on service consumption. As consumption continues to upgrade in China, service consumption increasingly became an important part of overall consumption. The main characteristics are as follows:

First, service consumption expanded steadily. The demand for a high-quality life among residents continued to expand, with strong demand in service fields such as culture, tourism, and health, which increasingly supported consumption. From January to April, the retail sales of services increased by 5.6% year-on-year, 0.1 percentage points faster than the growth rate in the first quarter, and significantly faster than the growth rate of retail sales of goods. "Cultural tourism boom" and "sports event boom" have since become new highlights in the development of service consumption. Related service retail sales registered fast growth. From January to April, retail sales of tourism consulting and leasing services, transportation services, and cultural and sports leisure services all maintained double-digit growth, significantly faster than the growth rate of service retail sales. The Qingming Festival holiday in April, combined with the implementation of the spring break system for primary and secondary schools in some provinces, enhanced the driving effect on cultural and tourism consumption. During the Qingming Festival holiday, the number of domestic tourist trips and total spending both increased by over 6%. Data from the transportation department shows that the growth of both railway and waterway trips accelerated in April.

Second, new forms of consumption showed good growth momentum. New forms of consumption, such as online consumption, digital consumption, and green consumption, developed rapidly, injecting new momentum into the development of the consumer market. Online retail sales of goods and services increased by 6.6% year-on-year from January to April. Online service retail sales grew by 8.3%, continuing to outpace merchandise retail sales and maintaining rapid growth. Residents are showing growing demand for diversified and personalized services, while digital service consumption scenarios continue to expand, driving rapid growth in related services consumption. Retail sales of communication and information services increased by more than 10% year-on-year from January to April. Against the backdrop of green transition, sales of new energy vehicles grew rapidly. In April, China's sales of new energy vehicles increased by 9.7% year-on-year, achieving a relatively rapid growth rate despite a high base last year. New forms and scenarios of consumer spending constantly emerged, with new forms and models such as instant-delivery online retail growing rapidly. Instant-delivery online retail maintained rapid growth from January to April, with unmanned stores accounting for over 20% of retail sales.

Third, consumption upgrading continued. With consumers placing greater emphasis on product quality, the consumption structure has been upgrading steadily. While volume growth in basic household goods remains modest, retail sales of many daily necessities have posted relatively strong gains so far this year. This is largely because consumers are placing greater importance on branding and quality, pushing up overall retail sales growth in the process. In the first four months, retail sales of grain, oil and food products rose 8.6% while beverages climbed 6%, both outpacing overall retail sales growth. These figures point to rising demand for higher-quality everyday essentials. Consumption upgrading is increasingly reflected in consumers' growing appetite for variety and personalization, which has fueled relatively strong sales growth in upgraded product categories. In the first four months, retail sales of communication equipment rose 17.7% and cosmetics 5.6%, both maintaining relatively strong growth.

Looking ahead, China has many favorable conditions supporting the expansion of consumption. First, China benefits from a vast market and abundant consumption scenarios. Steady progress in urbanization and integrated urban-rural development has further broadened the scope for consumption growth. Second, the supply of goods and services continues to grow alongside a steadily improving modern logistics system, helping consumption expand in both scale and quality. In addition, China's per capita GDP has exceeded $10,000, and the country is now in a phase of rapid consumption upgrading. Demand for high-quality products, along with cultural and sports services, continues to rise. Combined with the effects of pro-consumption policies, these trends will help support sustained consumption growth.

It should also be noted that there are still some constraints on consumption growth. Household purchasing power and willingness to spend need to be further strengthened, while market supply still cannot fully meet the needs arising from consumption upgrading. Looking ahead, we will work to effectively implement the special initiative to boost consumption, strengthen measures to stabilize employment and raise incomes, and expand the supply of quality goods and services. Efforts will also be made to improve the consumption environment. These steps aim to better unleash consumption potential and promote sustained, healthy economic development as well as improvements in people's livelihoods. Thank you.