As a series of policies took effect, China has witnessed expanding scenarios and improved expectations in consumption, which led to a rebound in market sales and a steady improvement in service consumption, according to its Q1 consumption data.
The country’s consumption, in general, is showing positive signs of recovery.
The retail sales of consumer goods totaled around 11.49 trillion yuan (about $1.66 trillion) in the first quarter, up 5.8 percent year-on-year. The revenue of the country’s catering sector increased by 13.9 percent from a year ago.
The Q1 growth was obviously higher than the growth in Q4 of 2022, said Hong Yong, associate researcher with the Chinese Academy of International Trade and Economic Cooperation.
In March this year, the retail sales of consumer goods registered a year-on-year growth of 10.6 percent, 7.1 percentage points higher than that in the January-February period, he said, adding that these figures indicated a recovering and improving consumption of China.
He told People’s Daily that multiple factors contributed to the recovering consumption. A slew of policies have been issued this year to promote consumption, and stable employment has been maintained, which has laid a solid foundation for the steady recovery of residents’ income and consumption, Hong explained.
In the first quarter, China’s per capita disposable income stood at 10,870 yuan, up 5.1 percent year-on-year in nominal terms, with 0.1 percentage points higher the previous year. After deducting price factors, the figure grows 3.8 percent year on year, 0.9 percentage points faster than the whole-year figure of 2022.
Consumption is playing an increasingly prominent role in driving economic growth. In the first three months, final consumption contributed to 66.6 percent of economic growth, which is a remarkable improvement from last year. It serves as the most important factor driving economic growth among the three major demands.
“Demands of Chinese consumers are more diversified and personalized. Only by developing more new products can we better meet their demands,” said an executive of dairy company Hoeslandt China at the recently held third China International Consumer Products Expo (CICPE).
The launches of new products at the CICPE mirrored a new trend of consumption upgrades in China.
The Q1 data indicated an encouraging momentum of rebound in the Chinese consumption market, and China’s consumption still maintained strong resilience, great potential and huge vitality, said Zhang Jixing, deputy director of the market research department of the Academy of China Council for the Promotion of International Trade.
The fundamentals sustaining China’s long-term consumption growth remain unchanged, and so does the general trend of consumption upgrade, he added.
Commodity sales maintained a steady recovery in Q1. With the gradual release of residents’ consumption potential, the consumption of upgraded goods picked up speed and that of everyday commodities kept growing.
In the first quarter, retail sales of goods increased 4.9 percent from the previous year. Nearly 70 percent of the 18 categories of retail sales above the designated size achieved year-on-year growth. In particular, the retail sales of jewelry and cosmetics went up 13.6 percent and 5.9 percent, respectively.
Both online and offline consumption saw faster growth. As market circulation improved, online consumption kept a growing momentum. In the January-March period, the online retail sales of physical goods nationwide increased 7.3 percent year on year, continuing to maintain rapid growth. Besides, offline consumption was also on a steady recovery.
Zhang believes that consumption, as a major engine driving economic growth, will play a bigger role in the future. In terms of medium- and long-term development, China is at a phase of rapid consumption upgrade with bright prospects, he explained.
“It’s great that I can experience the traditional culture while watching the beautiful flowers,” said a man named Hao Wei when visiting rape flower fields in Jining, east China’s Shandong province.
A series of themed activities such as poem exhibitions and immersive stage plays were launched around the rape flower fields to give better experiences to tourists.
According to statistics, the consumption of services, including tourism services, has significantly recovered. In the first quarter, in-person consumption in the catering, entertainment and tourism sectors grew fast.
The revenue of the country’s catering sector increased by 13.9 percent from a year ago to more than 1.21 trillion yuan. Statistics from e-commerce service platforms Meituan and Dazhong Dianping indicated that the number of reservations for domestic accommodation, transportation and tourist site tickets for the upcoming May Day holiday had tripled compared with the same period in 2019 as of April 10.
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