As we enter 2022, where does the endogenous driving force for China's economic development come from? The State Council Executive Meeting held on January 10 emphasized that we should firmly implement the strategy of expanding domestic demand and targeted expansion of final consum

"China Economic Weekly" Reporter Wang Hongru | Beijing report

Entering 2022, where does the endogenous driving force for China's economic development come from?

htmlThe State Council Executive Meeting held on January 10 emphasized that we should firmly implement the strategy of expanding domestic demand and targeted expansion of final consumption and effective investment.

Central Economic Work Conference held from December 8 to 10, 2021 pointed out that "Implement the strategy of expanding domestic demand and enhance the endogenous driving force of development."

Consumption is the lasting driving force of economic growth, and promoting consumption is a major measure to expand domestic demand. In 2021, my country will have abundant consumption and the momentum of consumption upgrading remains unabated. In the first three quarters, final consumption expenditure contributed 64.8%, an increase of 3.1 percentage points over the first half of the year, becoming the primary driving force for China's economic growth.

However, the spread of epidemics in many places has a great impact on the consumer market. Data released by the National Bureau of Statistics on January 17 showed that in 2021, the total retail sales of consumer goods was 440.823 billion yuan, an increase of 12.5% ​​over the previous year, and the average growth rate in the two years was 3.9%. From 2012 to 2020, my country's total retail sales of consumer goods increased by 8.4% annually.

At the end of 2021, the decline in the total retail sales of consumer goods in my country has begun to show signs. Data released by the National Bureau of Statistics showed that in November 2021, the total retail sales of consumer goods increased by 3.9% year-on-year, down 1.0 percentage points from the previous month; the average growth in two years was 4.4%, down 0.2 percentage points from the previous month. In December 2021, the total retail sales of consumer goods increased by 1.7% year-on-year and decreased by 0.18% month-on-month.

Under the epidemic, how to better promote consumption has become an important proposition for the sustained economic growth in 2022.

The epidemic has a great impact on consumption growth

At the end of the year, Xi'an City, Shaanxi Province, Xuchang City, Henan Province, Yuzhou City, and other places were hit by the new crown pneumonia epidemic again, and many regions and industries pressed the "pause button" again.

A new round of epidemic has caught Wang Hongbao, a citizen of Xuchang , a little off guard. From the discovery of two asymptomatic infections of in nucleic acid test in Yuzhou City on January 2, he hardly went out much.

Yuzhou is a county-level city and is managed by Xuchang. The distance between the two is about 38.3 kilometers. The extremely close distance has caused Xuchang and its subordinate Yuzhou, Changge , Yangling , Xiangxian and other cities to be locked down. The most affected are the service industries such as restaurants and hotels with strong contact.

"The Chinese New Year is coming soon, and many things have not been available for purchase. Starting from January 5, the government issued a notice to let citizens stay at home and try not to go out. Restaurants, hotels, shopping malls (except for life supermarkets, and other places are open), etc. have almost been closed, and there are no people on the street. I haven't left the community for many days. The property management gives each company a home out permit and gives it out every 3 days to buy some vegetables and daily necessities." Wang Hongbao told the reporter of "China Economic Weekly".

"You can know what is the most affected when you stay at home every day. Who will consume? Where will you consume?" Wang Hongbao sighed.

This is not difficult to understand. Once an epidemic breaks out in some areas, in order to reduce the risk of epidemic transmission, residents' travel will inevitably be restricted. As the mobility of people decreases, service consumption will inevitably be impacted.

Li Ke Aobo, deputy director of the Institute of Chinese Economic Thoughts and Practice at Tsinghua University, told the reporter of China Economic Weekly: "From the average growth of 3.9% in two years in 2021, its growth rate was halved compared with before the epidemic. Before the epidemic, the annual growth rate of my country's total retail sales of consumer goods was basically maintained at 8% to 10%. "

In the view of Feng Qiaobin, deputy director of the Macroeconomic Research Department of the Development Research Center of the State Council, my country's consumption weakened for a period of time, and as of now, various industries have recovered unbalancedly.

"There are some industries, such as catering, accommodation, hotels, tourism, etc., which are still very affected by the epidemic from time to time. As of now, my country's consumption demand has not returned to the level before the epidemic, which is something that everyone is more worried about." Feng Qiaobin told the reporter of "China Economic Weekly".

Middle- and low-income earners are greatly affected by the epidemic

Ministry of Finance released data showing that in 2020, the national tax revenue in 2020 was 15431 billion yuan, a year-on-year decrease of 2.3%.

Although tax revenue has declined, personal income tax and other income has grown against the trend.Data released by the Ministry of Finance shows that in 2020, the national tax revenue of personal income tax, , stamp duty and other tax revenue increased significantly. Among them, personal income tax revenue was 1156.8 billion yuan, an increase of 11.4% year-on-year.

Li Ke Aobo analyzed the reasons for the rise in personal income tax to the reporter of China Economic Weekly. "Since the outbreak of the epidemic, my country's personal income tax has grown rapidly, and no month is a negative, and it is the only 'red' tax. Most of the people who pay personal income tax in China are executives and employees working in large enterprises and institutions. Their work is relatively stable and their income is relatively high."

related data confirms Li Ke Aobo's above view. , professor at the School of International Relations, Renmin University of China , Wang Yiwei , said that the "China Statistical Yearbook 2019" released by the National Bureau of Statistics disclosed the proportion of people in various income levels in China. Currently, 90% of people in Chinese society have a monthly income of less than 5,000 yuan; 62% of people have a monthly income of less than 2,000 yuan; only 71.1 million people have a monthly income of more than 10,000 yuan, accounting for only about 5%. This means that only about 10% of residents in my country have a monthly income of more than 5,000 yuan, while the group with a monthly income of less than 5,000 yuan accounts for about 90% of the total population.

So, for the income group that accounts for 90% of the total population, which accounts for 90% of the total population, how should they improve their consumption capacity and level?

Li Ke Aobo suggested: "Many cities such as Xi'an and Henan have locked down, which has contributed to the people of the whole country. It is recommended to give certain economic compensation to these areas of the outbreak of the epidemic, and compensate individuals, so as to better boost consumption."

Precise epidemic prevention and minimize the impact of the epidemic on the service industry as much as possible

Service industry is a typical labor-intensive industry , and its ability to absorb employment in my country is better than other industries.

Data released by the National Bureau of Statistics showed that in 2018, the proportion of employment in my country's service industry reached 46.3%, and the employed population absorbed was 1.68 times that of the secondary industry and 1.77 times that of the primary industry. In 2019, the proportion of employment in my country's service industry reached 47.4%, becoming the main channel for absorbing employed people.

Li Ke Aobo proposed that the assessment of the impact of the epidemic on consumption should be improved. "It is recommended that local governments establish an assessment standard system for the impact of epidemic prevention on the service industry during the epidemic prevention and control process, with the purpose of not affecting consumption."

In epidemic prevention and control, my country has accumulated more and more experience: from the beginning of sealing a city, to the later sealing a district (county, city), to the next sealing a street or a community, Shanghai can now accurately seal a certain unit with only one building.

"my country's epidemic prevention and control has become more and more accurate. Next, it needs to be more accurate. Local governments must remember not to increase the investment layer by layer. The more accurate the epidemic prevention and control, the less impact it has on consumption." Li Ke'obo said.

consumption has become the first driving force for China's economic growth. As one of the three troikas driving economic growth, consumption has become the first driving force for China's economic growth in the past 10 years, second only to the United States and ranked second in the world.

Minister of Commerce Wang Wentao said at a press conference held by the China News Service on August 23, 2021 that from 2012 to 2020, the total retail sales of consumer goods in my country increased from 20.6 trillion yuan to 39.2 trillion yuan, an average annual growth of about 8.4%. my country has become the second largest consumer market in the world after the United States.

In addition to the rapid growth of retail sales of consumer goods, the proportion of service industry in GDP has also further increased.

Data released by the National Bureau of Statistics shows that from 2012 to 2018, the added value of my country's service industry increased from 2448.52 billion yuan to 469.57.5 billion yuan, an average annual growth rate of 7.9%, 0.9 percentage points higher than the average annual growth rate of GDP and 1.3 percentage points higher than the secondary industry. The proportion of the service industry in GDP has further increased, increasing by 6.7 percentage points in six years, exceeding 50% in 2015 and reaching 52.2% in 2018, accounting for half of the national economy.

In the past two years, the development of the service industry has been moving in the "fast lane". In 2019, the proportion of my country's service industry added value in GDP reached 53.9%, and in 2020, this ratio reached 54.5%.

Review of my country's economic growth model, in recent years, the economic structure has shifted from investment and export-driven to more consumption-driven.Public data shows that from 2013 to 2019, my country's final consumption expenditure contributed about 60% to economic growth, and consumption replaced investment became the first engine to drive economic growth.

However, the average contribution rate of final consumption expenditure to economic growth of 60% still has a lot of room for improvement compared with the level of 370% and 80% of developed economies.

Feng Qiaobin told the reporter of China Economic Weekly: "From the current situation in our country, there is still a lot of room for improvement to give full play to the role of consumption in driving the economy. The top priority is to improve the consumption policy , improve the consumption environment, improve the consumption capacity of residents, and open up more consumption growth points."

Consumption promotion policy continues to increase

Recently, the central government has repeatedly mentioned promoting and expanding consumption.

The Political Bureau of the CPC Central Committee held on December 6, 2021 proposed: "Implement the strategy of expanding domestic demand, promote the continuous recovery of consumption, actively expand effective investment, and enhance the endogenous driving force of development."

The Central Economic Work Conference held from December 8 to 10, 2021 pointed out: "Implement the strategy of expanding domestic demand, enhance the endogenous driving force of development."

Entering 2022, on January 10, the State Council held an executive meeting to emphasize: "Strengthen the strategy of expanding domestic demand."

Entering 2022. On January 10, the State Council held an executive meeting to emphasize: "Strengthen the strategy of expanding domestic demand." Determine the implementation of the strategy of expanding domestic demand and targeted expansion of final consumption and effective investment. "

The central government has repeatedly mentioned "consumption" recently. What is the profound meaning behind it?

"I understand that the main reason is that the growth rate of consumption has slowed down due to the impact of the epidemic. Judging from the average growth of the total retail sales of consumer goods in the past two years, consumption lags behind economic growth, and consumption growth is facing relatively high pressure. It is reasonable for the central government to actively deploy various consumption-promoting policies to stabilize consumption expenditures." Li Ke'obo said.

Faced with the current challenge of slowing down consumption demand growth, the National Development and Reform Commission, the Ministry of Commerce and other departments have intensively deployed consumption promotion measures.

htmlOn January 14, National Development and Reform Commission issued the "Notice on Doing a Good Job in Promoting Consumption in the Future", proposing 10 work measures to further release the consumption potential of residents and promote a stable start to the first quarter of the economy.

The work measures in these 10 aspects: First, take multiple measures to meet residents' holiday consumption needs according to local conditions; second, create an upgraded version of online festival consumption; third, effectively expand county and rural consumption; fourth, seize the opportunity to expand residents' ice and snow consumption; fifth, vigorously improve the supply of cultural, tourism and leisure services; sixth, further stimulate new vitality of smart retail; seventh, actively develop green consumption ; eighth, promote the healthy development of housing consumption; ninth, implement relief policies for small and medium-sized enterprises; tenth, make every effort to ensure the basic living consumption of people in need and other groups.

Ning Jizhe, deputy director of the National Development and Reform Commission, director of the National Bureau of Statistics and Secretary of the Party Group, recently said that there are many factors that restrict consumption and investment, and domestic demand is still insufficient. He stressed that in 2022, it is necessary to fully tap the potential of domestic demand, better play the fundamental role of consumption in economic development, and enhance the key role of investment in optimizing the supply structure.

htmlOn January 10, the Ministry of Commerce, the Central Cyberspace Affairs Office of , the Ministry of Industry and Information Technology of , the State Administration for Market Regulation, the State Post Bureau of , and the Chinese Consumer Association of and other departments jointly launched the "2022 National Online New Year's Festival ". This is not only a specific measure to ensure supply and promote consumption during the Spring Festival, but also an important focus for further stimulating the potential of domestic demand in response to the consumption needs of the people.

Minister of Commerce Wang Wentao said that in 2022, we must innovate methods and explore ideas, launch more new and practical measures, enhance consumer confidence and stimulate consumption vitality. At the same time, we must implement the requirements of promoting common prosperity, make up for the shortcomings in urban and rural circulation, cultivate new consumption forms and models, and promote consumption upgrading.

As the overall arrangements for promoting consumption in 2022 are launched by relevant departments, the key areas for promoting consumption are gradually becoming clear.

Ning Jizhe proposed that in 2022, in terms of focusing on expanding consumer demand, we must promote the transformation of automobiles from purchasing management to use management and vigorously support the consumption of new energy vehicles. Consolidate and expand basic consumption and upgrade consumption, and encourage places with conditions to carry out green and smart home appliances to the countryside. Expand new consumption such as information consumption, , green consumption, and cultivate and expand new consumption formats such as smart retail, digital culture, and smart tourism, .

The Ministry of Commerce proposed that it will focus on improving the traditional consumption energy level and accelerating the development of new consumption. It is necessary to make up for the shortcomings in urban and rural circulation, accelerate the construction of a modern circulation system, promote consumption upgrading, and enhance the fundamental role of consumption in economic development.

Feng Qiaobin analyzed to China Economic Weekly that the tone of work in 2022 is to be "stability" first, and seek progress while "stability". The central government clearly requires all departments and localities to introduce some specific measures and measures that are conducive to stabilizing growth and consumption, which can stabilize the momentum of consumption recovery to a certain extent.

Scholars are optimistic about the consumption growth rate in 2022

With a series of consumption promotion policies being introduced and gradually implemented, the consumption growth rate in 2022 will attract attention.

Feng Qiaobin is expected to grow by about 5%. "The 5% target is already very low, and this must be stabilized. We must work hard according to the goal of about 5%.

A scholar who did not want to be named predicts that the consumption growth rate will remain at around 6%, the reason is that although the epidemic has affected traditional consumer services, the modern service industry has grown well, and the demand for upgrading consumption continues to be released. China's economic data for 2021 released by the National Bureau of Statistics on January 17 showed that in 2021, the added value of transportation, warehousing and postal industries increased by 17.2% and 12.1% respectively over the previous year; in addition, the retail sales of gold, silver, jewelry and cultural office supplies units above the limit increased by 29.8% and 18.8% respectively. The scholar believes that these developments are enough to support the consumption growth of about 6% in 2022.

Li Ke Aobo's estimate is more optimistic. The consumption growth rate in 2022 will remain at 6% to 7%, mainly due to the following three aspects: First of all, epidemic prevention and control will do better this year than last year, "because after Winter Olympics , especially in summer, the spread of the virus is relatively reduced, which is conducive to consumption recovery."

, followed by a significant improvement in the industrial chain. "Especially, the factors that restrict my country's automobile consumption in 2021, such as the chip problem, can be alleviated to a certain extent."

is finally optional consumption such as clothing, housing and travel that was suppressed in the past two years. Demand is expected to stabilize and return to normal in 2022, "This will further promote consumption increase."

Editor: Yao Kun