Increase consumer demand to strengthen growth dynamics – Opinion

The authorities launched a set of progressive policies, in which expanding domestic demand to boost consumption proved to be a major task. China faces demographic challenges such as an aging population and declining birth rates, which impact both supply and demand.

The country’s population is heavily concentrated in cities, with most families living in high-rise apartments and urban space primarily used for commercial development. Apartments rarely have free space for other needs. For example, if a family wants to buy an additional car, the lack of parking space could force them to pay more for parking. Urban spatial constraints and high rental costs limit the supply of emerging services and affect their growth due to high prices.

Due to overtime and long commute times, many people lack “free time” during working days, leading to increased consumer demand on weekends or holidays, straining services in the tourism, catering, entertainment and other sectors during these periods. This also causes prices to rise sharply, affecting people’s consumption experience. Excessive concentration of service consumption in a short period also affects the willingness of service providers to invest in optimizing service quality.

China needs to stabilize economic growth and asset prices through progressive policies, to boost people’s expectations and consolidate the foundation for consumption expansion. Whether stock measures or incremental measures, the main thing is to promote their reliable implementation and make them drivers of growth. China’s consumption is characterized as a “dual structure” landscape due to different income levels, with 400 million middle- and high-income people, mainly in large and medium-sized cities, shifting toward consumption of services and needs. consumption patterns, while low- and high-income people shift to service consumption and improved consumption needs. Middle-income groups still have strong demand for basic commodities. This requires strengthening public service guarantees and stabilizing employment expectations.

China should therefore vigorously develop services in major cities and create more jobs while meeting the demands of the population. It is expected to accelerate the construction of a new type of urbanization and the orderly transfer of manufacturing industry, and provide public service guarantee and localized industrial jobs for low and middle-income groups.

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