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Consumption upgrade drives China’s economy

Updated: Oct 27,2016 11:58 AM

Premier Li Keqiang inspects a medical tourism zone in Bo’ao, South China’s Hainan province, March 25, 2016.

As the target of large multinational enterprises, Chinese consumers and their consumption demands have become a new engine to drive China’s economy, the second largest in the world.

According to the latest official data, consumption has contributed 71 percent to China’s GDP in the last three quarters, injecting new vitality into the economy. The Economist predicts that spending by Chinese consumers, who have spent $3.2 trillion, will go up to $5.6 trillion in 2020.

Premier Li Keqiang said in his 2015 work report that consumption of the general public should become the powerhouse of economic growth. The Premier also said on many occasions that “we should improve product quality and upgrade equipment manufacturing with advanced standards”.

On Oct 14, the State Council executive meeting chaired by Premier Li laid out measures to promote consumption in medical care, education, and other essential areas. The Premier said effective supply, particularly in services, should be increased through reform and innovation, to improve people’s lives and encourage new growth momentums.

Premier Li Keqiang inspects an animation production company in Central China’s Hunan province, July 4, 2014.

Financial Times said China’s main restructuring is still focused on capacity reduction, and meanwhile, a new economy of technology, internet and 415 million young consumers born in late 1980s is emerging.

The consumption upgrade in China is driving economic growth in Asia and paints an optimistic picture as a whole, said overseas reports.