Abstract The total retail sales of consumer goods in the first half of the year was 23.5969 trillion yuan, a year-on-year increase of 3.7%. In vertical comparison, the role of consumption in driving GDP has weakened, and there has been a differentiation between positive and negative growth in various provinces and cities. It is recommended to take measures to ensure stable and healthy economic growth based on changes in consumption trends. In the context of sustainable development, in order to form a social consumption atmosphere with the goal of improving people's quality of life and promote a virtuous cycle of the economy, the following measures can be taken: 1) Further reduce interest rates to reduce residents' consumption costs; 2) Cash can be distributed to low-income families to stimulate consumption; 3) Relax real estate purchase and loan restrictions, return real estate policies to normal, and maintain the wealth effect of real estate in residents' asset allocation; 4) Promote the two-way flow of urban and rural personnel, introduce identity-restrictive policies to break the free flow of urban and rural personnel, improve commercial financing policies, enhance the rural business environment, and develop "rural people in the city" and "rural people in the city". ;The huge consumption potential of "rural urban residents"; 5) Further expand the scope of equipment renewal and trade-in of consumer goods, but individual projects must grasp the necessity of renewal to avoid waste in pursuit of consumption figures; 6) Develop and strengthen the urban economy and create a consumption scene that combines culture, commerce and tourism in line with the lifestyle of contemporary people; 7) Further promote the development of the cultural tourism industry to meet the people's growing spiritual and cultural consumption needs; 8) Give full play to the advantages of my country as an industrial power, cultivate my country's own brand culture, and combine low cost with high brand value; 9) Strengthen the silver economy industry and provide suitable consumption scenes and infrastructure construction. Text Consumption data for the first half of the year was released, and the total retail sales of consumer goods was 23.5969 trillion yuan, a year-on-year increase of 3.7%. From the perspective of subdivision, this data in various provinces and cities showed different ups and downs. Negative topics about consumption have become the mainstream tone of society, and there are many comments on the so-called "consumption downgrade" and "lack of consumer confidence". Regarding consumption issues, McKinsey's report on consumption trends in 2024 has certain reference value, and different groups of people have different views on the future. The survey shows that Generation Z, wealthy seniors in first-tier cities, and wealthy middle-aged and elderly people in third-tier cities are significantly more optimistic, showing a positive consumption outlook; the new middle class in first- and second-tier cities and the middle-aged and elderly people in rural areas are the most pessimistic. The urban Generation Z is mostly single students and ordinary employees. They are relatively optimistic about the macro-economy and family financial situation. They generally believe that future income will increase and there is no need to be too frugal. There are many corporate executives or business owners among the wealthy seniors in first-tier cities, and the average disposable income of their families is high, especially the proportion of operating income is much higher than the average level. The wealthy middle-aged and elderly people in third-tier cities are similar to the wealthy seniors in first-tier cities. The proportion of corporate executives or business owners in this group is high, and the average disposable income of their families is significantly higher than that of the entire population. There are relatively more non-locals with middle and high education in the new middle class in first- and second-tier cities, and the proportion of optimistic people is relatively low. They are generally worried about the depreciation of assets caused by falling housing prices, high social unemployment rates, and unemployment or unstable income caused by changing situations. The proportion of unemployed middle-aged and elderly people in rural areas is high, with low incomes and reliance on transfer income, and the overall mood is relatively pessimistic. We also see that some consumption concepts are changing in reality. Shanghai Disney has raised its prices five times in eight years (the fifth price adjustment plan was announced in May and will be implemented in November 2024), but it is still crowded with tourists. People have not been discouraged by the increase in ticket prices; the concerts of Hong Kong and Taiwan stars such as Andy Lau and Jacky Cheung in mainland cities are hard to get even if the ticket prices are hyped up to tens of thousands of yuan; Luckin Coffee's performance has increased significantly, while Starbucks' performance has declined. Consumers still drink coffee, but choose Luckin because it is more cost-effective; in Shanghai, a prosperous city, low-priced Pinduoduo has emerged, with a market value exceeding Alibaba, and can be sold globally, breaking the inertial evaluation concept of consumption. Although the model is controversial, it has grasped the current people's psychological demands for happy consumption-you can buy expensive things but not too expensive, and it would be better if you can make a bargain. In the post-epidemic era, China's consumption is showing various new trends. 1. New trend changes in China's total consumption and structure Consumption is an important driving force for economic growth and one of the "three horses" of my country's economy. In recent years, my country's total consumption and structure have shown trend changes, and these changes may continue for the next few years, which deserves our attention. From the perspective of total volume, my country's consumption has weakened its role in driving economic growth recently. There are two aspects of data to support this judgment: First, as of the first half of this year, China's GDP growth rate was 5%, while the cumulative year-on-year data of total retail sales of consumer goods was 3.7%, and the consumption growth rate was lower than the GDP growth rate. Second, as of the first half of this year, consumer spending contributed 60.5% to GDP growth, and in 2023, consumer spending will contribute 77.4% to GDP growth.Structurally, the consumption structure and consciousness of residents in our country are undergoing changes.
Firstly, residents in our country are reducing "face consumption," placing greater emphasis on the cost-performance ratio of goods and services. The premium space for many consumer goods is rapidly shrinking, and some are even competing at a loss to attract attention. For instance, Pinduoduo, known for its affordable and high-quality products, has surpassed Alibaba in market value to become the largest consumer platform in our country. Despite ongoing debates about Pinduoduo's business model, it cannot stop consumers from continuously paying for it. Driven by this, Alibaba's original wholesale market has also entered the retail sector, and zero-dollar purchases have emerged in the business field. This situation is not only present in the small commodity sector but also in the emerging field of new energy vehicles, where a competition with losses is unfolding, and the final manufacturers are uncertain who will have the last laugh. However, consumers can choose their desired cars at low prices amidst the competition among sellers.
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Secondly, the demand for service consumption among residents in our country is surpassing previous goods consumption. Experience-based consumption, mainly in culture, sports, and tourism, is more capable of stimulating consumer enthusiasm. Throughout 2023, the box office revenue of China's performance market has shown an explosive growth trend. During this year's "May Day" period, the total number of domestic tourism trips in the country reached 295 million, a year-on-year increase of 7.6%; the total expenditure on tourist trips was 166.89 billion yuan, a year-on-year increase of 12.7%. This growth rate far exceeds the growth rate of residents' retail goods consumption, indicating a strong enthusiasm for service consumption and significant potential for development.
From the definition of economics, one party's consumption can be transformed into another party's income, forming an economic cycle. A positive and active consumption trend is crucial for the sustainable economic growth of our country. Under the new consumption structure and the changing trend of residents' consumption concepts, the potential of the new consumption market remains vast, and the government can take targeted measures to ensure people's livelihoods and promote consumption.
2. Aiming to improve the quality of life for the people, promote high-quality and stable development of consumption
Promoting high-quality development of consumption is a key factor in promoting a virtuous economic cycle and an important variable in building our country's domestic large cycle. We suggest that, aiming to improve the quality of life for the people, we should further promote the high-quality development of consumption among residents in our country.
Firstly, strengthen macro policy regulation, and first ensure the stability of the total consumption volume. The relationship between consumption growth and the economic cycle is close; when the economy is in an upward cycle, consumption growth usually goes up synchronously, and when the economy is in a downward cycle, consumption growth slows down. Fluctuations in consumption growth, like economic cycles, are inevitable phenomena. During the period of declining growth, we call for policies to increase the intensity of macro policy regulation, which helps to boost the confidence of businesses and residents, prompting the market to gradually return to a normal level.
Taking Shanghai's consumption data as an example, since the outbreak of the COVID-19 pandemic in 2020, influenced by various objective factors, the fluctuation range of the growth rate of retail sales of consumer goods in Shanghai has significantly increased, making people particularly concerned about the data of negative consumption growth. However, looking at the average level, from 2020 to the present, the average growth rate of the total retail sales of consumer goods in Shanghai has been 5.12%, basically in line with the GDP growth rate, indicating that Shanghai still has continuous consumption potential and space.
Therefore, during the period of declining consumption growth, it is necessary for the government to use a series of macro regulatory measures to support the total consumption volume, which can enhance the confidence and enthusiasm of businesses and residents, help the consumption market to recover to a normal level more quickly, and avoid forming a vicious cycle.Based on the above discussion, macroeconomic policy adjustments can boost consumption from the following five aspects:
1) There is still room for China's interest rates and reserve requirement ratios to decrease. When interest rates and reserve requirement ratios are lowered, the interest rates on consumer loans and mortgage loans for residents will also decrease synchronously. This will reduce the threshold for residents to engage in mass consumption or large-ticket consumption, which is conducive to facilitating the convenience of consumption and promoting an increase in the total volume of consumption. Since the beginning of this year, the one-year LPR rate has been cumulatively reduced by 10 basis points to 3.35%, and the five-year LPR rate has been cumulatively reduced by 35 basis points to 3.85%. There is still room for adjustment in China's short-term and long-term interest rates. The reduction of short-term interest rates helps to lower the cost of consumer loans for residents, while the reduction of long-term interest rates can reduce the mortgage pressure on residents and promote the flow of funds back to the consumer market.
2) Efforts should be made to eliminate residents' uncertainty about future income. For low-income families, cash can be distributed to stimulate consumption. Maintaining stable household consumption is an important factor in supporting economic development. Essentially, residents' confidence in consumption is based on stable employment and income expectations. However, economic fluctuations are always cyclical, and in the economic downturn cycle, the bottom-up policy for residents' consumption becomes particularly important. It is suggested that in the current fiscal policy, a portion of funds can be allocated to distribute cash to low-income or unemployed families to maintain the stability of consumption for low-income families. On the other hand, local governments can consider using consumer subsidies, interest-free loans, and other methods to stimulate residents' enthusiasm for consumption.
3) It is recommended that real estate policies return to normal. There is an inseparable link between consumption and residents' wealth, with 70% of China's residents' wealth concentrated in real estate. In recent years, as real estate prices have fallen, the value of residents' assets has shrunk, which inevitably has a negative impact on consumption. It is suggested that local governments should relax purchase restrictions, loan limits, and other measures that originally restricted transactions to promote the return of real estate market transactions to normal, maintain a neutral policy that neither encourages nor restricts, and maintain its reasonable liquidity.
4) Promote the rational two-way flow of urban and rural populations, and further introduce urban-rural integrated development policies that are consistent in terms of employment, life, education, and services, to improve the lives of low-income groups and increase consumption potential. The rural population base is large, and the marginal propensity to consume is high. With the increased two-way mobility between rural and urban populations, it is helpful to facilitate the flow of goods, technology, and resources from cities to rural areas. At the same time, China's cities have absorbed a large number of rural populations for employment, and many cities still have situations where rural populations are separated from employment, residence, education, and life. Further promotion of urban-rural integration development is needed to enable rural people in cities to improve their consumption capacity, live a dignified life, and expand the domestic consumer market base. At the same time, further promote rural revitalization, introduce policies that are conducive to urban populations participating in rural revitalization in terms of life, employment, and management in rural areas, improve the business environment in rural areas, and adjust the relevant financial restrictive policies for urban populations operating projects in rural areas.
5) Further expand the scope of large-scale equipment renewal and consumer goods replacement, so that promoting consumption and industrial upgrading complement each other, but be vigilant against the problem of waste for the sake of consumption. It is suggested to include more advanced production capacity and advanced technology products in the scope of large-scale equipment renewal and consumer goods replacement, allowing residents to enjoy the achievements of economic development and technological progress.
Secondly, from the micro level, encourage enterprises to develop more commercial products, provide commercial services that are more in line with the needs of the public, and form a better business environment. Specifically:
6) Develop and grow urban economies according to local conditions, improve the quality of urban commerce, create consumption highlights, and adapt to the lifestyle of contemporary urban populations. Urban residents are still the main body of the current consumer market. With the development of urbanization in China for many years, the urban business model has become very mature, but there is a serious phenomenon of homogenization. At the same time, the continuous closure of traditional commercial places further indicates that the original business model no longer has competitiveness. To further stimulate residents' consumption demand, it is necessary to adapt to the modern lifestyle and consumption methods in the urban business model, transform and upgrade traditional commercial shopping places, promote the transformation of new urban cultural, commercial, and tourism combined commercial consumption scenes, and avoid the phenomenon of "thousands of shopping malls with the same face."
7) Increase the supply of consumption in the fields of culture and tourism and other spiritual and cultural areas, and encourage and support the healthy and orderly development of the culture and tourism industry. After more than 40 years of development since the reform and opening up, people's material needs have been met to a certain extent, and the consumption of spiritual and cultural aspects has begun to increase. Compared with the traditional "buy, buy, buy," today's consumers are more willing to pay for cultural and spiritual consumption that provides emotional value. The concerts of stars such as Andy Lau and Jacky Cheung are very popular in major cities in the mainland, which to some extent shows that people are not without money to consume, but are willing to consume what they like. It is suggested to encourage enterprises to explore and create more service consumption products, provide more policy support for new types of experiential consumption enterprises, such as policy support for introducing international star events, and certain policy inclinations in terms of rent, taxes, and bank credit for places that combine culture, commerce, and tourism, to encourage a variety of service consumption to flourish.
8) Utilize China's advantage as a manufacturing powerhouse, cultivate China's unique brand culture, combine low cost with high brand value, and create a group of Chinese brands with high quality and low price. At present, consumers, especially young people, have an increasing demand for "high-quality and low-priced" national trend brands, and high quality and cost-effectiveness have become the keywords for consumers to choose products. Looking at the consumer markets of developed countries such as Europe, America, Japan, and South Korea, many successful enterprises combine their high-quality products, relatively low prices, and excellent corporate culture to become evergreen enterprises, and have also cultivated a large number of loyal consumers. Based on the strength of China's manufacturing industry, China is not short of enterprises that can produce high-quality products, but at the same time, our enterprises still have great development potential in cultivating corporate culture and strengthening their own brand value. At present, Chinese consumers' identification with local culture is continuously increasing, and they are willing to consume products and services with Chinese elements and Eastern culture. This is reflected in the widely praised products in clothing, food, and other aspects such as Li-Ning, BaWang Tea Princess, UR, and DJI. This kind of consumption not only meets material needs but also reflects cultural confidence. The government should encourage enterprises to seize this trend of the times, cultivate enterprise brands with Chinese cultural characteristics, and enhance Chinese consumers' confidence in domestic brands and cultural confidence.9) With the increasing proportion of the elderly population in our country, and as the baby boomers from around the 1960s in our country gradually enter retirement, the silver economy holds tremendous potential for consumption. The elderly in urban areas, after experiencing more than 40 years of reform and opening up in China, possess a certain amount of family wealth and also have a demand for high-quality retirement life. People after retirement begin to live the life they "want to live." The silver economy is not just about nursing home services. Surveys have found that this group has significant potential for consumption in areas such as clothing, food, housing, transportation, travel, learning, and entertainment, but there is a severe shortage of consumer products. It is recommended that the government further support the development of the elderly care industry, introduce industrial policies to promote the silver economy, provide a richer array of products, services, and consumption scenarios, and break the personnel mobility policies that restrict the development of the silver economy. In addition, as the degree of social aging increases, the demand for companionship and nursing staff among the elderly also rises synchronously, which will promote the consumption of corresponding services.
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