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E-mail China.org.cn, February 25, 2025
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My questions are about consumption. The Central Economic Work Conference emphasized the need to boost consumption substantially. What was China's overall consumption performance in 2024? What's your take on the current sluggishness in the consumer market? Will consumer market conditions improve in 2025? Thank you.
Kang Yi:
Thank you for your question. Consumer spending is indeed a widely shared concern. In 2024, regions and departments across China strengthened policies to expand domestic demand and boost consumption while stabilizing household spending. Since the fourth quarter, expanded trade-in programs for consumer goods have shown sustained positive results, leading to a clear rebound in market sales and supporting overall economic recovery. Specifically, there were several key characteristics:
First, the market size continued to expand. In 2024, total retail sales of consumer goods reached 48.8 trillion yuan, a 3.5% increase from the previous year, maintaining a leading global position. Specifically, the fourth quarter saw a 3.8% year-on-year increase, 1.1 percentage points higher than the third quarter. In terms of its contribution to economic growth, final consumption expenditure drove economic growth by 2.2 percentage points for the year. In the fourth quarter, it contributed 1.6 percentage points, up 0.2 percentage point from the third quarter.
Second, trade-in programs had a significant impact. In 2024, the central government allocated 150 billion yuan in special ultra-long treasury bonds to local governments to support consumer goods trade-in programs tailored to local conditions. Retail sales of household appliances and audiovisual equipment by units above designated size increased by 12.3% year on year, accelerating by 11.8 percentage points. Furniture sales grew by 3.6% annually, accelerating by 0.8 percentage point. Since the second half of last year, policies promoting trade-ins of consumer goods have been strengthened, leading to faster sales growth of appliances, automobiles and other goods in recent months, and significantly boosting overall consumption recovery.
Third, service consumption played a prominent role as a new driving force. The trend toward personalized, diversified and quality-oriented consumer spending was evident, with consumption patterns shifting from primarily goods to a balance between goods and services. Service consumption is also increasingly becoming a key area for optimizing and upgrading the consumption structure. In 2024, the proportion of per capita service consumption expenditure to overall per capita consumption expenditure increased by 0.9 percentage point compared to the previous year. Service retail sales grew by 6.2%, outpacing the growth rate of commodity sales. Demand for cultural tourism remained strong, information consumption boomed, and retail sales for transportation, communication and information services all maintained double-digit growth.
Fourth, new types of consumption showed potential. Online sales, instant retail and other new consumption models continued to gain momentum. In 2024, online retail sales of physical goods rose 6.5% from the previous year, driving express delivery volume to a record high. At the same time, domestically produced goods, "China Chic" products and traditional Chinese-style items gained widespread popularity. New business models such as digital cultural tourism, livestream e-commerce and online fitness services continued to emerge. Smart homes, smart wearables and other new scenarios continued to expand, demonstrating rapid growth potential. In particular, retail sales of energy-efficient and smart home appliances sustained double-digit growth rates.
Of course, we must also recognize that consumers' purchasing power and willingness to spend remain insufficient, and consumption demand indeed needs further boosting. Looking to the future, various favorable conditions are in place to sustain consumption growth. First, policies to promote consumption will continue to be strengthened. The Central Economic Work Conference further proposed a comprehensive expansion of domestic demand, which will unleash more policy effects. Second, the overall employment situation remains stable, laying a foundation for increased household income. We will intensify efforts to boost income and reduce burdens among low- and middle-income groups, helping to strengthen household spending capacity. Third, new consumption scenarios and business formats show continued expansion. Recently, many regions have seized on the "ice and snow fever" trend to promote related spending. At the same time, new growth points, such as the debut economy and silver tourism, are gradually taking shape, which will help boost consumption development. Fourth, China continues to demonstrate the advantages of its ultra-large market. The nation's population of more than 1.4 billion and increasing urbanization rates indicate massive consumption potential, providing strong support for steady consumption growth.
Next, we need to fully implement the decisions and plans of the Central Economic Work Conference and carry out special actions to boost consumption. This includes promoting income growth and reducing burdens for low- and middle-income groups. We will also work on improving consumer spending power, willingness to spend and consumption levels, while creating diverse consumption scenarios and expanding consumption of services.
Thank you.
Shou Xiaoli:
Thank you to Mr. Kang Yi and Mr. Fu Linghui, and thanks to all our media friends. Today's press conference ends here. Goodbye.
Translated and edited by Liu Caiyi, Xu Xiaoxuan, Yang Chuanli, Zhang Jiaqi, Liu Jianing, Xu Kailin, Liu Sitong, Wang Yiming, Yuan Fang, Mi Xingang, Fan Junmei, Li Huiru, Huang Shan, David Ball, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
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