Consumption to further drive Chinese economic growth in 2024: experts

2024-01-16 08:57:03Global Times Editor : Li Yan ECNS App Download

With consumers' enthusiasm for winter sports and tourism on the rise, the Chinese consumer market has seen a surge in activity, providing a strong start for the economy in 2024.

Chinese experts predict that retail sales will grow about 5 percent this year, with tourism, green consumption and online spending as highlights.

Online travel agency anticipates significant growth in outbound and inbound travel during China's 2024 Spring Festival holidays, which will run from February 10 to 17.

Harbin, Northeast China's Heilongjiang Province, experienced a surge in popularity, with travel bookings soaring by over 14 times year-on-year, according to a report sent to the Global Times on Monday.

During the three-day New Year's Day holidays, "ice and snow tourism" was a popular theme for holiday travel. There were 135 million domestic tourist trips, up 155.3 percent year-on-year. Domestic tourism revenue reached 79.73 billion yuan ($11.21 billion), up 200.7 percent.

According to the Civil Aviation Administration of China, the number of air trips during the 2024 Spring Festival travel season starting from January 26 will reach 80 million, up 44.9 percent year-on-year and up 9.8 percent from the same period in 2019.

According to a survey conducted by McKinsey in November 2023, the tourism and entertainment industries have emerged as the primary drivers of China's consumption growth. Notably, domestic tourism has rebounded significantly, surpassing the levels observed in 2019.

Continued urbanization and rising income levels are expected to sustainably drive consumption growth in the medium to long term, it said.

China is set to release its 2023 GDP data on Wednesday.

According to the National Bureau of Statistics, retail sales reached 42.8 trillion yuan in the first 11 months of 2023, up 7.2 percent, playing a crucial role in supporting the recovery and improvement of the national economy.

In the first three quarters of 2023, consumption expenditure accounted for 83.2 percent of economic growth, or 4.4 percentage points of GDP growth.

The momentum of the consumer recovery in 2023 was clear and will continue in 2024, Tian Yun, a veteran economist based in Beijing, told the Global Times on Monday.

Tian said that retail sales will rise about 5 percent this year and contribute about 50 percent of overall economic growth.

According to a report from the Chinese Academy of Sciences Center for Forecasting Science, China's economy will maintain stable growth in 2024, with GDP growth of about 5.3 percent.

The report also predicted that in 2024, China's nominal consumption growth rate may come in at between 4.2 percent and 5.1 percent, remaining the main driver of economic growth.

"We see strong green industrial production and consumption in 2024. The government will likely revise up the national emission standards, which will promote equipment replacement and electric vehicles," Xing Zhaopeng, senior China strategist at ANZ, told the Global Times.

The Central Economic Work Conference, a tone-setting meeting for economic growth in 2024, has outlined plans to stimulate consumption.

The development of digital consumption, green consumption and health consumption should be further promoted, and new growth areas such as consumption of smart home appliances, entertainment and tourism, sports events and trendy domestic brands should be fostered, according to the meeting.

Consumption of products including new-energy vehicles and electronic products should be stimulated, while efforts should be made to increase the incomes of urban and rural residents and expand the scale of the middle-income group, the meeting said.

"A surge in consumer spending on tourism, information technology and online purchases will be prominent in 2024," Tian said.

In the first 11 months of 2023, online retail sales reached 14 trillion yuan, up 11 percent.

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