China's consumption-driven development model basically established http://news.hexun.com/2015-04-17/175037256.html The 2015-04-17 00:17:46 source: China business times author: ren-ping li

"Consumption rate exceeded 50% for the first time in the past decade, ranking first in the Troika." The 2015 Consumption Market Development Report which is issued by Ministry of Commerce pointed out that the consumption-driven development model will be basically established this year, and the growth rate, structure, hotspots, drive of consumption will change accordingly. Unlike the spokesman of Statistics Bureau Sheng Yun’ opinion that the contribution of consumption to GDP ratio in the first quarter may reach 60%, according to Zhao Ping’s interpretation, who is deputy director of Consumption Economic Research Department of Ministry of Commerce, the full-year contribution ratio of consumption was always used to clarify the status of consumption, which in fact only reflected the proportion of consumption in economic growth, while consumption proportion in the stocking economy has always been low and hovering around 40% for a long time. However, consumption rate, which means the consumption share of GDP, is a more comprehensive measure of the proportion of consumption. Therefore, “consumption rate exceeded 50% for the first time in the past decade with the specific measurement data of 50.5 percent, which means the consumption-driven development model is basically established. Consumption firmly takes the first place of pulling force "Report" predicts that by 2015, the momentum of consumption development is obviously better than the investment. From an investment perspective, the main factors leading to the slowdown of the growth rate declining of fixed assets investment won’t change fundamentally. The DE-capacity in those obvious overcapacity industries of manufacturing and real estate still need a long period. However, the growth in consumption over the same period are showing the contrary trend, in terms of consumption occupying the first place both in economic stocks and increment. Annual consumption contribution rate keeps the trend of going beyond investment contribution rate. Consumption rate exceeded 50% for the first time in the past decade and consumption firmly takes the first place of pulling force in national economy. In this regard, Zhao Ping interpreted, in 2015, economic development has entered a new normal with economic growth from high speed to medium-to-high speed and stable growth is still the top priority. During the economic downturn, the most obvious decline is in investment growth. Although consumption growth also appears a certain degree of downside, with the best stability, it shows the strongest pulling power in the troika and thus appears opposite trend against the investment growth. Zhao Ping introduced, "The development goals of consumption, investment and exports set in the 12th Five-Year Plan Outline has been basically achieved, and the consumption-driven development model is basically established.” In the same time, the momentum conversion of consumption growth is substantially complete, consumption shifting from commodity to service, traditional to new. "Report" noted that service consumption become the main force driving consumption growth. Since the economic downward pressure will inevitably transmit to the consumption, the growth of commodity consumption in 2015, represented by the total retail sales of social consumer goods, will decline further. However, the growth rate of service consumption is much higher than that of commodity consumption. Among them, the growth rate of housing, health care, culture, education and entertainment services consumed much faster than food and clothing, with a sharp rise in the proportion of total consumption. Transport and communication grew more pronounced. Strong growth in new consumption. Annual online retail sales growth is expected to remain around 50%, accounting for the proportion of total retail sales of social consumer goods increased by 1 percentage point, and sales representing consumption structure upgrading significantly go faster than general consumer goods. The consumption proportion of daily necessities and durable goods declined. Engel coefficient，which is on behalf of food consumption, continued to decline by nearly 0.5 percent per year; Chinese urban and rural consumption entered a relatively wealthy development stage; the proportion of clothing consumption decreased by 1 percentage point every three years; automotive consumption maintained low growth. Consumption division becomes the new normal "Report" predicts that the consumption market will firstly appear the dividing line of high-end luxury and high-end mass. Take the luxury goods of foreign brands as a example. They will be divided to high-end mass goods and high-end luxury goods. By 2015, differentiation of China's high-end consumption market will be more obvious. The market pricing of some international brands which don’t belong to luxury will drop sharply and slip back to mass consumption field. Luxury of the entry-level and mid-level brands slash prices, fading luxury coat, sought after by the general public. A small amount of top luxury’s prices are still being achieved, keeping the image of high-end luxury market, mainly to meet needs of very few wealthy people. "Report" forecasts that division will also appear between personalized customization and mass consumption. Zhao Ping introduced, the dividing line in alcohol consumption is very obvious, and the pricing systems in liquor market are segmented, such as the high-end wine prices of Maotai, Wuliangye and other brands in general 600-1000 yuan, the local top-line wine 100-300 yuan. Some high-end liquor companies also actively seperate their high-end brands from low-end brands. Maotai, Wuliangye and other high-end liquor are planning to separate their corporate brands and series wine, and operate the low-end series independently. Meanwhile, more local top- or second-line brands achieve populist through e-commerce. "Report" proposed division between private consumption and public consumption. "In the past two years, high-end dining looking for directions completed the transformation, began to realize and accept the changes in the market. Some high-end dining that formerly aimed at the public consumption are transformed into public consumption places, returning to popularization by means of group-purchasing and online shopping. On the other side, high-end dining aimed at private consumption will be transformed into a industry to serve a small minority group. Zhao Ping believes that with public consumption being strictly limited, this divison will become more apparent. "Report" believes that the ultra-high-end hotels and the mass consumption will be divided. The ultra-high-end hotel market has a clear orientation and has achieved good results in the consumer market. Mid-scale and budget hotels focus on public consumption. With small margins but a large number of consumers, the increase of the revenue per available room follows the ultra high-end hotel closely. Only the performance indicators of high-end hotel market appears a downward trend. Information consumption has become an important engine for consumption growth “Report” also made a prediction on consumption highlights of 2015. It believes that wise living consumption, green environmental consumption, the global fashion consumption, culture and sports consumption will become the highlights of the consumption market. "By 2015, the consumption of luxury goods will usher in a new round of small climax, and will continue for some time," Zhao Ping especially mentioned the "report" of this judgment. With Zhao Ping’s interpretation, although anti-corruption measures will restrain the demand for luxury goods in some degree, with the acceleration of urbanization, the improving of the internationalization level, the upgrading of people's awareness and demand level of high-end consumer goods, China's luxury market actually has considerable consumption potential. "The luxury price slashing led by Chanel has pulled down the price differentials in and out of China, which is for the first time and brings a great deal of consumption enthusiasm. Recently, purchasing boom has appeared one after another at Chanel counters in Shanghai, Beijing, Nanjing, Hangzhou. It can be described as the signal of luxury consumption reflux, boosting consumers’ confidence of the luxury market." Zhao Ping pointed out that, in fact, with the continuous improvement of cross-border e-commerce enterprises’ developing environment, the number of cross-border e-commerce platforms and the optional commodity increase largely, and Chinese consumers are integrating into the international consumer market more quickly. “Report” said that the consumption of smart phone, tablet, Internet TV will steadily increase; wearable devices, smart appliances and other new information products will become the new consuming hotspots; online video, online games and other information services will grow fast, mobile games and mobile reading will increase rapidly; online shopping will keep on developing and cross-border online shopping will further speed up; the fields like Web-enabled car will be fully broken through, the consumption of Web services will develop rapidly and wise living will lead the fashion consumption.