China’s private consumption rose 9.1 percent yearly to CNY34.5 trillion (USD5 trillion) over the first 11 months, with the full year figure projected to top CNY38 trillion, a set of official data shows.
The structure of the consumer market keeps upgrading and consumer demand has diversified even as its scale continues to expand.
China’s Engel’s coefficient decreased 0.7 of a percentage point on the year to 28.5 percent from January to September and the momentum of rising consumption remains strong, state Xinhua News Agency reported, citing Wang Bin, vice director of the Ministry of Commerce’s Department of Market Operation and Consumption Promotion.
Engel’s Law holds that, as incomes rise, their proportion spent on food drops, even if absolute expenditures food increase, public information shows.
Consumption of services was 50.2 percent of all consumer spending, up 0.5 of a percentage point and passing the 50 percent mark for the first time ever.
China’s consumption models are also innovating, with emerging ones such as online to offline, green consumption, the sharing economy, smart retail and others are developing rapidly. Online retail sales of physical goods rose 25.4 percent over the first 11 months this year, for 18.2 percent of total sales of consumer goods.
Consumption also contributed more to economic growth, accounting for 78 percent of gross domestic product growth in the first nine months, which is 13.5 percentage points higher than a year ago and making it the top force driving economic growth for five consecutive years.
Consumption growth will come under some pressure next year due to certain adverse factors, predicted Wang, adding the development of China’s consumer market still has many favorable conditions against the backdrop of the unchanged fundamental of China’s steady development and the steady momentum of rising consumption.
The department will focus on optimizing the supply of goods and services, improving the convenience of consumption in urban and rural communities, enhancing the consumption environment, and promoting the sustainable and healthy development of China’s consumer market, MOFCOM spokesman Gao Feng said.
Source: Yicai Global