China has been speeding up consumption transformation in recent years, moving toward a simultaneous emphasis on quantity and quality. As consumption structures further optimize, the new middle class is emerging as a strong power to ignite changes, according to Li Yongjian, a researcher at Chinese Academy of Social Science, News portal The Paper reported.
China’s GDP totaled 101.6 trillion yuan last year, up 2.3 percent from a year earlier and making the country the only major economy in the world with positive growth. From 2019 to 2020, the country saw per-capita GDP exceeding $10,000 for two consecutive years.
Although the COVID-19 outbreak struck the consumption sector, a report from McKinsey shows the mood, behaviors and characteristics of Chinese consumers had returned to pre-epidemic levels by March this year.
In the first quarter, China’s retail sales of consumer goods soared 33.9 percent year-on-year, and registered an increase of 1.86 percent from the previous quarter.
Consumption has become the biggest driver to China’s economic growth, and also the ballast of economic stability, Li said. Consumer spending accounted for 53.4 percent of GDP from 2011 to 2019 on average, and 54.3 percent in 2020.
In 2019, China’s consumption market (including retail sales and service consumption) has registered $6 trillion, only $200 billion or about 3 percent from that of the US, research from China International Capital Corporation Limited showed.
The report anticipated volume to hit $7 trillion by 2022, surpassing the US as the world’s largest consumption market.
As China has achieved the goal in building up an all-around
, or moderately prosperous society, the scale of the middle class has continued to expand and become the stimulus in consumption structure optimization.
Homi Kharas and Meagan Dooley, senior analysts at the Brookings Institution, said the increase of incomes in China is faster than earlier estimates, and about 1.2 billion Chinese are expected to join the “middle class club” by 2027, accounting for a quarter of the world’s total.
The rapid expanding of this group will boost the continuous growth of consumer markets, Li said.
In 2019, service consumption accounted for 45.9 percent of China’s total consumer spending. Per-capita consumption expenditures on services increased from 6,442 yuan to 9,896 yuan, an increase of 54 percent from 2015 to 2019.
China’s online shopping volume reached 11.76 trillion yuan in 2020, an increase of 10.9 percent over the previous year and accounting for about 40 percent of the global total.
New consumption modes related to health, sustainability and green development adopted by middle class have also gone widespread.
The Global EV Outlook 2021 by the International Energy Agency reported 3.24 million new energy vehicles were sold in 2020, with about 41 percent of sales coming from China – the world’s biggest NEV market.