CNBC:

Many analysts are concerned that due to the consumer goods trade-in program, consumption will slow down after June. What is the NBS's outlook for consumption? What are the main factors driving consumption? Thank you.

Sheng Laiyun:

This is a very good question. Before looking ahead to the consumption outlook for the second half of the year, let me first introduce the performance of China's consumer market in the first half of the year. This will help everyone better understand the characteristics and supporting factors of China's consumer market. It will also provide a more intuitive sense of consumption trends for the second half of the year.

The performance of the consumer market this year has been remarkable. Among the many indicators just released, one major highlight is the quarter-on-quarter growth in market sales. In the first half of the year, the year-on-year growth rate of total retail sales of consumer goods accelerated, and market activity increased, both of which strongly supported GDP growth during this period. In the first half of the year, total retail sales of consumer goods reached 24.55 trillion yuan, up 5% year on year. Growth in the second quarter was 5.4%, 0.8 percentage point higher than the first quarter, indicating a steady quarterly improvement. As just announced, consumption contributed 52% to economic growth in the first half of the year, making it a major highlight of this period.

Several characteristics of consumption in the first half of the year are worth noting. First, service consumption saw faster growth. In the first half of the year, service retail sales increased 5.3% year on year, outpacing the 5.1% increase in goods retail sales. The share of services in overall consumption continued to grow. Second, holiday consumption played an increasingly important role in driving economic growth. In the first half of the year, consumption during the three holidays — Spring Festival, May Day and Dragon Boat Festival — was particularly robust, with the number of travelers reaching a record high. In addition, spending on cultural, sports, leisure and transportation services continued to achieve double-digit growth. Third, there was a marked acceleration in the growth of several upgraded consumption categories. After meeting their basic needs for food and clothing, people are increasingly focused on development- and enjoyment-oriented consumption. In the first half of the year, the retail sales of sports goods increased 22.2% year on year, while retail sales of gold and silver jewelry rose 11.3%. Fourth, green consumption gradually emerged as a new trend. In the first half of the year, the consumption of new energy vehicles, energy-saving home appliances and smart home appliances continued to grow at a relatively fast pace. Fifth, traveling and shopping in China continued to gain momentum. In particular, as China expanded its visa-free policy, more tourists visited the country, providing a further boost to domestic consumption. During the May Day and Dragon Boat Festival holidays, the number of foreign visits to China under the visa-free policy rose by 72.7% and 59.4% year on year, respectively. Sixth, new consumption models and business formats continued to emerge. Currently, trends such as self-indulgent consumption, emotional spending, and various new forms of personalized and diversified consumption are all on the rise.

Taken together, these features show that in the first half of the year, China's consumer market became more dynamic and showed positive momentum, driven by a series of policies to boost domestic demand and promote consumption. This suggests a solid foundation for continued consumption growth in the second half of the year. The factors and consumption trends seen in the first half of the year will continue into the second half. In addition, policies to support consumption will continue to be strengthened. Just now, there were concerns about certain aspects of the consumption subsidy policies. However, the relevant authorities have already announced that new stimulus and subsidy measures for the second half of the year are gradually being rolled out, and local governments will continue to introduce additional initiatives to promote consumption. We are now at a critical stage of upgrading our consumption structure, with per capita GDP holding steady above $13,000 for two straight years. This stage is a crucial period for consumption upgrading, with vast potential in cultural tourism, health care and elderly care. With a population of over 1.4 billion, our country has a clear advantage in market scale. However, the gap between urban and rural areas remains considerable, and our consumption level — especially the per capita level — still lags behind that of some developed countries. This gap points to considerable room for growth. China has excellent prospects for future consumption growth and vast market potential. Therefore, we remain highly optimistic about consumption in the second half of the year. Of course, we also recognize that sustaining healthy consumption growth requires raising residents' incomes and further improving the overall consumption environment. In these areas, policies and measures introduced by the central government and relevant departments are continuing to make progress. Local governments need to further implement the central government's directives on expanding domestic demand and follow the guidelines of the action plan to boost consumption. They should work to stabilize employment, promote income growth and improve the consumption environment. By increasing the supply of high-quality goods and services, local authorities can help ensure the sustainable and healthy development of the consumer market. Thank you.