Customers shop at a supermarket in Anshun City, southwest China's Guizhou Province, December 9, 2023. /Xinhua
Consumption will remain an important driver of China's economic growth in 2024 and there will be ample opportunities for investment, experts said, analyzing the outcomes of the country's annual Central Economic Work Conference.
The meeting was held in Beijing on Monday and Tuesday as Chinese leaders decided on priorities for the economic work in the coming year. It said that China's economy has achieved a recovery, with solid progress made in high-quality development in 2023.
Expanding domestic demand is one of the priorities of China's economic work in 2024, the meeting noted, adding that it is necessary to boost consumption with growth potential and expand effective investment, so as to form a virtuous cycle of mutually promoting consumption and investment.
Zhou Mi, senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told CGTN that the virtuous cycle will not only enhance the role of consumption as a key driver of Chinese economy, but also provide more opportunities for domestic and foreign enterprises.
Jin Tianlin, a researcher at the Academy of Macroeconomic Research, said that the cycle contributes to sustained and healthy economic growth.
"Growing consumption can encourage enterprises to expand production scale and increase investment, which can create more jobs, raise people's income levels, and in turn boost consumption growth," Jin told CGTN.
The meeting also said that China will increase the income of urban and rural residents, expand the size of the middle-income group, and improve the consumption environment.
More investment opportunities
Retail sales of consumer goods, a major indicator of a country's consumption strength, totaled 38.54 trillion yuan (about $5.37 trillion) in China from January to October, up 6.9 percent from a year earlier, according to the National Bureau of Statistics (NBS).
Zhou said the recovery of China's consumer market in 2023 is not a simple expansion of scale, but the emergence of some new forms of consumption, such as green consumption and digital consumption.
Taking the consumption of new energy vehicles (NEVs) for example, Zhou said, new products and diversified services in the market offer more choices for consumers with new tech features. In the first three quarters of 2023, global sales of NEVs reached 9.75 million units, with China contributing 6.28 million units, or over 64 percent, according to data released at the 2023 World New Energy Vehicle Congress.
Zhou said that continued promotion of Chinese modernization will create more opportunities, providing space and support for the development of various enterprises.
"China's policies are consistent, providing a stable political, social and investing environment for enterprises," said Zhou, adding that these are also key elements that foreign investment value.
People buy jewelry at a gold shop in Shenyang City, northeast China's Liaoning Province, December 11, 2023. /CFP
Optimistic outlook
The meeting said China still has to overcome some challenges, including lack of effective demand, overcapacity in some sectors, and lackluster social expectations.
Zhou said that most countries, including China, were under considerable pressure for economic recovery this year as the world faces a difficult situation after the pandemic.
In addition to creating more consumption scenarios, Zhou said, policies to boost consumption should also focus on increasing people's incomes.
"We also need to expand service consumption and improve product quality control, including traceability of some key products and the alignment with international standards and specifications," Zhou added.
Jin held similar views with Zhou, adding that more policies are needed to optimize structure of supply and demand, and improve consumer sentiment through subsidies, tax cuts, or credit support.
Along with several major financial institutions, Goldman Sachs and the United Bank of Switzerland (UBS) have expressed optimism for China's economic prospects in 2024. Goldman Sachs said Chinese consumption next year will continue the recovery momentum of 2023.
China's retail growth, encompassing both products and services, is expected to rise by 5 percent in 2023, with similar projections for the coming years, which would make China the single-largest growth market globally, according to a recent report by McKinsey.
The report said the low consumer sentiment could dampen growth rates in the short term, but long-term prospects of the Chinese market remain robust as continued urbanization and rising income levels are expected to sustainably drive consumption growth.