Instilling the confidence to spend

According to the data on travel and tourism during the 2022 Spring Festival holiday, household consumption is still weak.

For instance, a total of 131 million trips were expected to be made nationwide during the holiday from Jan 31 to Feb 6, up 33.4 percent year-on-year, but down 69 percent from the same period in 2019. And national tourism revenue during the holiday was 289.2 billion yuan ($45.46 billion), 56.3 percent of that of 2019.

A survey of urban depositors released by the central bank shows that the proportion of urban residents saying they were "consuming more" was 24.7 percent in the fourth quarter of last year, lower than the 28 percent in the same period of 2019, while the proportion of urban residents choosing "saving more" was 51.8 percent, higher than the 45.7 percent in the same period of 2019. That highlights people's low consumption willingness.

The grim employment situation has affected consumption. Although 12.69 million new jobs were created last year, the surveyed urban unemployment rate in December was 5.1 percent, rising for two consecutive months and only 0.1 percentage point lower than in the same period in 2020.And the unemployment rate of the population aged between 16 and 24 has reached 14.3 percent.

In response, the central authorities released a notice on boosting consumption in mid-January in the hope that consumption can play its fundamental role in contributing to economic development, which calls for efforts in the following aspects.

More jobs should be created by easing the tax and fee burdens on small enterprises and individual businesses and increasing financing to them. Reform of the income distribution system should be accelerated to ensure that personal income growth can become more sustainable.

The epidemic prevention and control measures should avoid a sweeping one-size-fits-all approach, and be designed and carried out according to the practical conditions of different localities.

At present, the novel coronavirus is still spreading in multiple places, which continues to impact the service sector. Accelerating the establishment of a targeted epidemic prevention and control system is the key to realizing coordinated epidemic prevention and control and economic and social development proposed by the central authorities, as well as an important prerequisite for boosting consumption.

The country should constantly cultivate new consumption growth points. For example, China can take the opportunity of the Beijing 2022 Winter Olympics to increase participation in ice and snow sports and leisure activities. It should also pave the way for new-energy vehicles to enter rural areas, and promote the upgrading of durable consumer goods in rural areas.

The authorities can encourage places where conditions permit to provide subsidies or discount the interest on loans for green building materials, low-carbon and energy-saving products, and actively develop green consumption.

To sum up, comprehensive measures are needed to boost consumption so it can better play a fundamental role in driving economic development.