Steady Consumption and Increased Investment:China's Economic Potential

In recent years, with the continuous improvement of residents'income and the steady expansion of effective investment, domestic demand has become the main force driving China's economic growth. In the first quarter of this year, final consumption expenditure contributed 65.1% to China's GDP growth and 76.2% in 2018. According to the data of the National Bureau of Statistics, the total retail sales of consumer goods in April were 3058.6 billion yuan, an increase of 7.2% over the same period last year. Although the growth rate has fallen, it still maintains a good momentum of growth. There are also many positive factors in the investment, which are mainly reflected in the sustained recovery of investment scale and growth, and the improvement of investment structure and quality. From January to April, the national fixed assets investment (excluding farmers) was 1557.47 billion yuan, an increase of 6.1% over the previous year, an increase of 0.2 percentage points over the whole year. Among them, the growth rate of infrastructure investment has recovered, and the investment in high-tech industries has increased rapidly. More than 1.3 billion people, 900 million labor force, trillion-level consumer market, effective investment recovery, has become a strong underpinning for China's economy to maintain high-quality development. The data from the National Bureau of Statistics show that in April, the total retail sales of consumer goods in China reached 3058.6 billion yuan, and the average retail sales per month exceeded 100 billion yuan. From January to April, the retail sales of consumer goods market expanded by more than 950 billion yuan compared with the same period last year. In April, the total retail sales of consumer goods increased by 7.2% year-on-year, down 1.5 percentage points from last month. Zhang Min, a statistician from the Department of Foreign Trade and Economics of the National Bureau of Statistics, believes that this is mainly affected by the May Day holiday movement, excluding the factors of holiday movement, and the growth rate in April is basically the same as that in March.

In addition to the steady growth of consumption scale and growth rate, China's resident consumption is showing new characteristics: fast growth of emerging industries, increased service-oriented consumption expenditure, and more diversified, personalized and quality resident consumption. Data show that from January to April, the national online retail sales volume was 3043.9 billion yuan, up 17.8% year-on-year, and the growth rate continued to be ahead of the total retail sales of social consumer goods. In the first quarter, the per capita consumption of education, culture and entertainment, medical treatment, transportation and communications increased significantly faster than the overall growth of consumption expenditure, of which the per capita consumption of education, culture and entertainment increased by 20.6%. The growth of residents'disposable income and the promotion of consumption policy are the powerful guarantee for the upgrading of consumption quality. Last year, the average annual wages of urban non-private and private employees increased by 8.7% and 6.1% respectively. In the first quarter of this year, the per capita disposable income of Chinese residents was 8,493 yuan, an increase of 6.8%. At the same time of income growth, the per capita consumption expenditure of Chinese residents in the first quarter was 5538 yuan, an actual increase of 5.4%. In addition, tax cuts and fee cuts directly benefit ordinary consumers. In the first quarter, the individual tax reform totaled 91.63 million people's salary income without paying personal income tax, with a per capita tax cut of 855 yuan. Many experts believe that in the long run, China's consumption still has room for growth. Shen Jianguang, vice president and chief economist of Beijing East Digital Technology, said in an interview that there are still huge consumer markets in China's second and third tier cities that have not been fully tapped. The demand for high-end services is strong, but the supply is still insufficient, which is the driving force behind the development of the consumer market. Cheng Shi, chief economist of ICBC International, believes that with the help of improved income equity and expansion of high-quality supply, this year's consumption escalation is expected to extend to a wider and more grass-roots population, and low-level urban and rural consumption is expected to accelerate. Liu Xuezhi, a senior researcher at the Financial Research Center of Bank of Communications (6.000, 0.00, 0.00%) predicts that with the transformation of economic structure, the driving role of consumption will gradually increase, with the potential for steady growth, and this year may achieve growth of about 8%.

Stable Investment Policy to Promote Investment Structure Continued to Optimize

From January to April, China completed a total of 1557.47 billion yuan in fixed assets investment (excluding farmers), an increase of 6.1% over the same period of last year, an increase of 0.2 percentage points faster than that of last year. Among them, infrastructure investment increased by 4.4% year-on-year, 0.6 percentage points faster than last year. In infrastructure investment, investment in ecological protection and environmental governance increased by 37.6%, and investment in information transmission increased by 26.1%. The investment structure continues to be optimized, and the role of investment in making up for shortcomings, accelerating the transformation and upgrading of new and old kinetic energy continues to be highlighted.

From January to April, manufacturing investment increased by 2.5% year-on-year, and the growth rate fell by 2.1 percentage points from the first quarter. Although the growth rate of manufacturing investment has fallen, the internal structure has been further optimized, reflecting the improvement of domestic demand structure and quality improvement. Specifically, investment in high-tech manufacturing increased by 11.4%, higher than 8.9 percentage points of total manufacturing investment. In addition, investment in high-tech services increased by 15.5% year-on-year. Among them, the investment in e-commerce services increased by 45.1%, R&D and design services increased by 18.7%, and the investment in technology achievements transformation services increased by 16.1%.

The double improvement of quality and efficiency of investment benefits from a series of "stable investment" policies, especially the accelerated issuance of financial funds and large-scale special bonds, which has played a guiding role in promoting precise investment. This year's "Report on the Work of the Government" put forward that we should closely follow the national development strategy and speed up the implementation of a number of key projects. This year, the central budget allocated 577.6 billion yuan for investment, an increase of 40 billion yuan over last year. It is reported that in the first quarter, the central budget investment arrangements have reached more than 80%. In addition, since this year, the issuance and use of special bonds by local governments have made rapid progress, effectively guaranteeing the capital needs of key construction projects and playing a positive role in achieving a smooth start to the economy. It is worth noting that China is exploring more standardized and efficient ways of government investment.