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Tapping the Potential of Domestic Consumption

China Economic Weekly January 15, 2024

By NewsChina Updated Apr.1

Despite persistent unemployment, China has experienced a significant surge in consumption, particularly in areas such as travel, auto sales and retail. Fueled by sports events, caterings and cultural promotions, big cities and small villages have become popular tourist destinations. According to the China Tourism Academy, in 2023, over 90 percent of Chinese expressed a desire to travel, a 4.52 percentage point increase from 2019, a year before the pandemic lockdown. Meanwhile, automobile sales reached 4.32 trillion yuan (US$600b). Livestreaming and AI have transformed retail, but urban plazas and dining still bolster onsite consumption. During the three-day New Year holiday, offline consumption payments hit 25 billion yuan (US$3.48b) in Shanghai, up 80 percent year on year. Nevertheless, China still needs to enhance personal disposable incomes to unlock the full potential of individual consumption.