China’s middle-income population will rise steadily and may reach 800 million in the next 15 years, said Qian Keming, vice minister of commerce of China (MOFCOM), over the weekend, adding the country’s 1.4 billion population, buoyed by a booming economy, will make them a significant consumption force in the world.
At the 2020-2021 China Economy Annual Meeting held by the China Center for International Economic Exchanges (CCIEE), Qian said that the final consumption proportion of China’s middle-income population is 55.4 percentage, with the proportion in developed countries hitting more than 70 percentage.
“China’s consumption development has many advantages in general,” said Qian. However, he argued that some constraints, such as income level, supply structure and consumption environment, will slow down the development.
Due to the COVID-19 pandemic, China’s per capita DPI (disposal income) for residents only increased by 0.6 percent in the first three quarters of 2020. In addition, housing, education, medical care and pension expenditures account for a relatively high proportion of residents’ spending, which creates a crowding-out effect on retail consumption, said Qian.
On the other hand, Qian said with the increase in residents’ income, consumption upgrades are accelerating, which means that some high-quality and diversified consumer demand needs to be released. At the same time, the consumption facilities are not mature enough and the convenience of consumption needs to be improved.
At last, Qian stressed that the problems of product quality still exist. The building of credit systems and a solid social welfare system is helpful for the improvement of the consumption environment.
The Ministry of Commerce (MOFCOM) Photo: VCG
