China to cultivate 3 consumption sectors worth 1 trillion yuan each by 2027

Six Chinese government departments, including the Ministry of Industry and Information Technology (MIIT), have vowed to cultivate three consumption sectors each worth 1 trillion yuan ($141.2 billion) and 10 consumption hotspots of 100 billion yuan each by 2027, according to an action plan shown on the MIIT's official website on Wednesday.

The plan also states that by 2030, the contribution rate of consumption to economic growth will be steadily increased. In order to enhance the alignment between supply and demand to further unleash consumption potential, the document sets out 19 key tasks, including strengthening the integrated empowerment of artificial intelligence, cultivating new consumption scenarios and business forms, and enhancing fiscal and financial support.

The plan will actively promote the debut economy for consumer goods by supporting the opening of "first stores." In addition to fostering the orderly development of platform consumption, it will also develop shared consumption, including promoting shared wheelchair and shared stroller services in public venues such as supermarkets, hospitals, and amusement parks.

Efforts will also be made to expand the supply of specialty and new products, such as promoting the expansion and upgrading of green products, driving the upgrading of rural consumer goods, and developing leisure and sports products, according to the plan.

The plan highlighted the development of interest-driven consumer products such as pet-related goods and services, animation and comics, trendy apparel, and collectible toys and figures.

Under the premise of strictly controlling risks and ensuring safety, it vowed to promote the orderly expansion of low-altitude consumption offerings, including low-altitude tourism, aerial sports, private aviation, and consumer-grade drones. In addition, the country will develop consumption in the automotive aftermarket, including vehicle modification, recreational vehicle camping, and motorsports events, while promoting the high-quality development of car rental services.

According to the plan, China will focus on matching the needs of different consumer groups, including enriching the supply of infant and child products, expanding the supply of fashionable and trendy items, and optimizing the supply of elder-friendly products including eldercare service robots.

"Amid rising uncertainties in the external environment, more targeted measures to boost domestic demand can significantly enhance economic resilience. In addition, consumption upgrading will drive supply-side innovation, thereby creating broader market space for the development of new quality productive forces," Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Wednesday.

Wang noted that the plan, focusing on the alignment between supply and demand, strengthens technology empowerment and scenario innovation in tandem with the supply side, while combining precise market segments with inclusive livelihood benefits on the consumption side, which will create a stronger enabling environment for the sustained development of China's consumer market with fiscal and financial instruments.

According to the National Bureau of Statistics, retail sales reached 4.629 trillion yuan in October, up by 2.9 percent year-on-year. In the first 10 months, retail sales reached 41.217 trillion yuan, up by 4.3 percent.

Wang noted that China's consumption has remained overall steady during the past 10 months. "To help achieve this year's economic growth targets, consumption needs to shoulder a greater role in stabilizing growth. By introducing policy support to stimulate the vitality of market entities, this plan will further facilitate a virtuous cycle linking consumption, employment, and income."

Wang also noted that the plan highlighted long-term targets, which charted a clear direction for the development of consumption in China. "On the one hand, it will unleash the potential of domestic demand with new business formats; on the other hand, the plan will promote high-quality economic development, with leveraging innovation to boost consumption upgrading," the expert noted.