Consumption is the key engine driving economic growth

2023-03-17

Author: Zhou Mi (Director and Professor of the China Urban and Regional Economic Research Center, Nankai University) As the epidemic gradually dissipates, the night economy, urban economy, and online economy in various regions have begun to recover, and the flower appreciation economy and tourist economy, which combine rural, scenic, and human resources, have gradually flourished. Consumption is the ultimate demand, both the starting point and the ultimate driving force of economic growth. Effective supply and effective demand are the conditions for sustainable development of production. Effective demand mainly includes investment demand, consumption demand, and export demand, which are often seen as the troika of economic growth. Currently, many industries are in a deep transition period: the return on investment in industries is low, blind expansion of investment may lead to further overcapacity, and export demand is subject to various external factors, with significant fluctuations. In this context, consumption has become a key engine driving economic growth. Since 2020, policy documents to promote consumption have been intensively issued, and many documents have clearly focused on consumption to expand domestic demand. Promoting consumption expansion and upgrading is an important content in forming a strong domestic market. The report of the 20th National Congress of the Communist Party of China also emphasizes the need to "enhance the fundamental role of consumption in economic development", which will inevitably promote the release of China's consumption potential and bring greater market space for China's economic development. There are various ways in which consumption can drive economic recovery. First, activate potential consumption. This requires clarifying issues such as "whose consumption is to be satisfied?" "How to grasp and meet potential consumption?". For example, a landmark business district that highlights modern fashion and historical culture is a standard configuration for activating consumption. With the accelerated development of leisure, entertainment, gourmet food, performances, and other shopping and experience formats that integrate eating, drinking, traveling, shopping, and entertainment, more new landmarks, new scenes, and new brands have emerged, constantly satisfying consumers' aspirations for a better life that is international, high-quality, stylish, and comfortable. Secondly, we should release preventive consumption. During the epidemic period, residents are more inclined to increase preventive savings and reduce consumption expenditure due to their preparedness. Therefore, releasing consumption requires finding a breakthrough in residents' preventive needs. For example, Chinese households generally consider future medical and elderly care needs for savings. Therefore, expanding the supply of high-level medical and health services, building a high-level multi-level elderly care service system, and designing more accurate health care consumer products can become a powerful way to release preventive savings and stimulate consumption. Finally, we need to loosen the shackles of consumption. Many consumption needs to be controlled under specific circumstances, but with changes in the economic environment and market conditions, it needs to be dynamically adjusted and appropriately loosened in a differentiated manner. For example, with the introduction of the two-child and three-child open policy, the demand for improved housing for some families can be moderately activated. Thirdly, we should strengthen the introduction of external consumption. At the national level, promote the introduction of foreign demand through the construction of free trade zones and free trade ports; At the urban level, introduce the needs of other regions, such as accelerating the flow of consumer groups between different cities and regions through the integration of culture, tourism, and business. At this time, how to retain consumption has become an important lesson for enterprises and governments everywhere. Improve the influence of brand, popularity, and popularity by gathering people before consumption; Create scenarios in consumption, depict consumption paths, and label consumption cycles

Edit:sishi    Responsible editor:xingyong

Source:https://epaper.gmw.cn/gmrb/html/2023-03/17/nw.D110000gmrb_20230317_4-06.htm

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