Spending power key to restarting consumption engine

The weak global trade growth has prompted most major economies to stimulate domestic demand by actively promoting the consumption of automobiles, electronic products and home furnishings, as well as sports, leisure activities, cultural tourism and other services. China is carrying out similar measures. The National Development and Reform Commission issued 20 measures on Monday to restore and expand consumption.

China's economy is facing new difficulties and challenges. And weak domestic demand is a prominent issue that must be addressed effectively as soon as possible, as it is directly related to the overall fitness of manufacturing, the job market and investment.

The 20 measures are designed to stimulate consumption, improve the conditions for consumption, spur the creation of innovative consumption scenarios, fully tap the advantages of the country's huge market, smooth the economic cycle, and release the country's huge consumption potential.

The measures are all closely related to people's daily life. For example, it promotes the sales of cars and new energy vehicles, house purchases, the upgrading of public infrastructure, such as the construction of a high-quality charging infrastructure system for electric vehicles, and shanty town renovation projects.

In the first half of this year, consumption contributed 77.2 percent of the economic growth. If the 20 measures, along with other policies, can help consumption maintain stable growth in the second half of the year, the resilience and stability of China's economic development will be further enhanced.

But it must be pointed out that the fundamental issue is that people must have money to spend. Increasing people's disposable income and consolidating their confidence in the prospects of the economy are the keys to unlocking the spending power of families. It is therefore necessary to stabilize employment, implement employment priority policies, and help solve the employment problems of key groups.

Although the country has arguably the largest middle-income group in the world, comprising around 400 million people, a considerable part of their wealth takes the form of real estate. So the extent to which the government can stabilize the housing market at an early date will also have a bearing on whether the pro-consumption measures can produce their desired effects.

Consumption's wide connections with different fields of the economy means any measure that can effectively boost consumption must be multipronged and systemic.

- Li Yang, China Daily