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Tariff cuts, more online retail, and better services -- these are just some of the reasons behind China's strong consumer spending, and that, in turn, drives global growth. We take a look at the big role consumption is playing.
Consumption upgrade. That's a trending phrase in China. Online retail sales grew more than 30 percent on year in the first half of this year. Sales of such products as home appliances, audio-visual products, smartphones and cosmetics that represent consumption upgrades rose by more than 10 percent. Tariff cuts that began July first for some products are also expected to boost consumption.
NINGBO RESIDENT "The tariffs are lower now, the product is one or two hundred yuan cheaper than before."
NINGBO RESIDENT "Car lovers now can buy new cars more frequently now. The cars are more affordable after tariff cuts."
China's strong consumption is also an engine for global consumption growth. Data shows that China's consumption contributed 23.4 percent to global consumption growth each year from 2013 to 2016. That's while the contributions of the US, the Eurozone and Japan to consumption were 23, 7.9 and 2.1 percent respectively in the same period. Meanwhile, China's consumption grew 7.5 percent annually from 2013 to 2016. That's while consumption in the US, the Eurozone and Japan was 2.2, 1 and 0.6 percent in the same period.
XU XIANCHUN ECONOMICS PROFESSOR, TSINGHUA UNIVERSITY "I think China has a huge market and potential for consumption and investment. We have to improve quality of Chinese products. Many Chinese went abroad to buy product, that means Chinese purchasing power is increasing. We have to adapt to this need and improve our goods quality. "