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Consumption upgrade helps maintain economic growth

Updated: Jan 9,2016 9:53 AM

Total retail sales of consumer goods in 2015 are expected to hit 30 trillion yuan ($4.5 trillion), making consumption the most powerful driver of economic growth.

Consumption in rural, central and western areas is growing faster than overall average consumption in the country and rural consumption has outpaced urban consumption for three consecutive years. The consumption of services, especially entertainment services, is growing faster than that for goods with the cinema box office estimated to exceed $5 billion in 2015.

Qu Jiang, a researcher at Zhejiang University of e-commerce development in rural areas, said large home appliances are becoming popular in rural areas where online shopping companies such as Alibaba and have been expanding their business.

China has the largest online retail market in the world thanks to its fast developing e-commerce sector. Mobile e-commerce boomed in 2015, as O2O (online-to-offline) businesses exceeded 300 billion yuan in 2015, 80 percent more than last year.

The online retail sales from January to November 2015 hit 3.45 trillion yuan, and online retail sales for 2015 are expected to hit 4 trillion yuan.

Online travel and food-delivery services are among the fast growing O2O businesses.

The government also adopted measures to reform the “supply side” to help companies offer quality products and attract more consumption.

One measure will push for a quality tracing system for goods such as traditional Chinese medicine, meat and vegetables. Another will set up a system recording and disclosing cases of counterfeits.

In the next stage, the government will encourage consumption of services and consumption that is intelligent, green, healthy and safe.