On February 20, 2023, China's State Council convened its twelfth special study session, focusing on the theme of boosting consumption to expand domestic demand. Premier Li Qiang presided over the meeting, emphasizing the necessity of aligning consumption growth with improving people’s livelihoods, illustrating the government's commitment to enhancing economic stability and growth.
During the session, Li underscored the pivotal role of consumer spending as both a remedy for current economic challenges and as part of broader strategic reforms. "To stimulate consumption is not only a key measure for enhancing domestic demand and stabilizing growth but also a significant step for long-term transformation of the development mode," Li stated, pointing to the multifaceted approach the government intends to employ.
Li highlighted the unique advantages of China's large economy, which relies heavily on internal circulation. He advocated for policies focused on boosting consumer capacity and optimizing the consumption environment. The session featured insights from Liu Yuanchun, President of Shanghai University of Finance and Economics, along with discussions from other senior officials including Vice Premiers Ding Xuexiang, He Lifeng, and State Councilor Shen Yiqin.
During the discussions, Li reiterated the necessity of addressing residents' needs to tap the vast consumption potential within China. He called for significant improvements across several key service sectors including education, healthcare, culture, sports, tourism, senior care, and domestic services, particularly focusing on adapting to the challenges posed by population aging and the urbanization of rural populations.
The Premier urged for the acceleration of reforms aimed at rectifying service shortages and improving quality. "We must rely more on boosting consumption to expand domestic demand and facilitate economic circulation," he emphasized, highlighting the need for the government to implement policies aimed directly at enhancing consumption.
Another focal point discussed was the promotion of technology consumption, with Li stressing the importance of acknowledging China's ability to leverage its rich application scenarios and rapid technological advancements. He stated, "We must dig deeply to meet the wants of residents and to fully leverage China's vast consumption potential," advocating for the integration of artificial intelligence technologies to stimulate market demand.
Li also called for strategies to boost consumption in segmented markets, leveraging China's large population base to create diversified products and services. This push aligns with the growing trend toward greater consumer choice and specificity, ensuring higher quality offerings across various segments.
To bolster consumer confidence and spending, Li stated the necessity for coordinated policy measures to address existing hurdles. "Boosting consumer spending must address specific issues and adopt coordinated policies," he reiterated, emphasizing the government's proactive stance on reforming the market to encourage consumption.
Li’s remarks reflect the government's broader economic policy framework, aimed at consolidative strategies to persistently drive growth through domestic consumption. By advocating for substantive change across service delivery and addressing barriers, the State Council aims to invigorate the economy, translating to increased demand and dynamic market participation.
This session signifies the Chinese government's recognition of the changing economic landscapes and the need to shift gears from traditional growth models. With consumer spending as the forefront of this new strategy, it is anticipated to generate significant impacts on the economy's overall health and vitality.
The Chinese government’s commitment to revitalizing consumption demonstrates optimism about the future economic environment, signaling its readiness to adapt and innovate to meet the ever-evolving needs of its population and the global economy.