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Optimistic consumption data reveal China’s economic vitality

(People's Daily Online)  Sissy Zhang  2016-02-12 07:55


Asia's largest subway station, Futian underground railway station starts operation in Shenzhen, south China's Guangdong Province, on December 30, 2015. (Xinhua/Lu Hanxin)

 

A new study on worldwide car purchase trends shows that car buyers in China are ready to spend more money for a new car than consumers in other countries, the US-based Forbes magazine reported. The indicator can to some extent reveal the rising confidence in the Chinese market.

According to the report released by Kantar Media, 41 percent of polled Chinese consumers are ready to pay the equivalent of $32,200 or more for a new car. In Germany, only 14 percent were ready to pay that amount. The proportion was 10 percent in the UK and Australia, 5 percent in Spain and 4 percent in France, respectively.

As the global economy undergoes  deep adjustments, traditional indicators such as GDP, export volume and fixed-asset investment can no longer comprehensively represent economic development.

Against such a backdrop, consumer orientation has emerged as an increasingly important element to analyze economic patterns.

Take China as an example. The country’s service sector accounted for 51.4 percent of the overall GDP during the first three quarters of 2015. Contributing 58.4 percent of economic growth, consumption has become the biggest driving force for GDP growth.
In the same period, online retail sales saw a year-on-year increase of 36.2 percent. Besides, in the first 11 months of last year, the added value of the high-tech industry increased 10.4 percent over the previous year, 4.1 percentage points higher than that of traditional industries.

Meanwhile, the “Internet Plus” action plan is transforming the online shopping industry, leading to a rapid development in e-commerce, online education and other new types of online businesses. New business modes, including smart city, are also springing up.

A nation’s economy should be analyzed on the basis of its national condition.
The US, for example, used the “champagne index” to estimate average household income, which had proven to be 90 percent accurate.

For China, the 13th Five-Year Plan is a roadmap for the nation's development from 2016 through 2020. In that time, more weight will be placed on economic structure than growth rate, said Stephen Roach, an economist and senior fellow at Yale University.

With a medium-high growth rate, China is also optimizing its economic structure and upgrading its industry.

A Financial Times report suggested that, compared to traditional indexes, online sales, box office numbers, railway passenger capacity and some other new figures deserve more attention.

Bloomberg also sees the  double-digit growth in China’s demand-oriented services as good news.
At present, China is adopting an innovation-driven strategy with emphasis on supply-side structural reform to usher in an economic “new normal” featuring more emphasis on economic structure.

Choices made in the post-crisis era will not only inject new impetus into China’s development, but also bring new opportunities to the global economy by achieving a better balance between demand and supply.


(The story was originally published on Business Day on January, 29th, 2016.)