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China set to boost consumer goods sector

Zhang Yue
Updated: May 11,2016 7:08 PM

China will implement special measures to establish a more advanced consumer goods sector within two years by increasing product variety and quality and ensuring more domestic brands achieve a global reputation.

Such measures were discussed and arranged at the State Council’s executive meeting on May 11, presided over by Premier Li Keqiang.

“Developing consumer goods, improving product quality, nurturing brands and increasing product variety, these are demands from the market, especially when China’s economy has entered a certain stage,” Premier Li said.

The new crusade is also a major step in the country’s supply-side structural reform, encouraging the consumer goods sector to nurture innovative products with more variety that will better satisfy consumer demands.

“The upcoming action should be dominated by the market, and the government should clarify access based on market and consumer demand, and help build a good environment for enterprises,” Premier Li pointed out.

The sector has enjoyed advantages in China in previous decades due to the low cost of labor, and has contributed greatly to China’s prosperity over the past 30 years in the transition from a planned economy. Yet these advantages have shown signs of decline as competition in the global market intensifies, and industries are now facing problems such as lack of innovation and quality.

According to the new project, which will be carried out from 2016 to 2018, more varieties of higher-end consumer goods will be provided to customers based on their demands. Enterprises will be encouraged to spend more on R&D funding and take steps to enhance product design. The project also encourages nurturing more products with a greater input of intelligence and expertise, and Chinese national features.

“The government should assist enterprises to lower production costs and improve product quality through further streamlining administration. Meanwhile, the government’s main task is to enforce good supervision,” the Premier emphasized.

There will be an emphasis on quality over quantity, meeting the idea of “craftsmanship spirit” in manufacturing that was raised by Premier Li Keqiang during this year’s Government Work Report.

“We will also encourage enterprises to use flexible and custom-tailored production processes and foster a craftsmanship spirit of striving for the best, so that more types of products, products of a higher quality, and brand products will be made,” Premier Li said when delivering this year’s Government Work Report.

On many different occasions, he has also emphasized the importance of the “craftsmanship spirit of striving for the best” for China’s manufacturing sector.

The project also encourages major consumer goods producers to meet international standards.

Such efforts will be carried out in nine types of consumer goods, in particular, domestic appliances, watches, bicycles, goods for daily consumption, food as well as in the culture and sports sectors.

The project will also narrow the gap between China’s current standards of manufacturing consumer goods with global standards, and nurture a more well-rounded branding system.

One official at the meeting suggested establishing certain transitional standards helping more innovative products to enter the market quicker. Meanwhile, a more efficient (simplified) arbitration system can be set up for greater protection of intellectual property rights.

Spending overseas has grown rapidly among Chinese consumers in recent years, fueled by a rising demand for high-quality products and services in the global market.

At a State Council meeting last November, Premier Li, having noticed such trends, said the government will not place restrictions on people purchasing overseas or even shut out the world, but instead, should give consumers more options, adding that the domestic market needed to improve consumer products.

The upcoming plan marks another step from the government in line with Made in China 2025, an initiative to comprehensively upgrade industry that was unveiled by the State Council last year.

Premier Li hopes that through the upcoming action, China will not only become a country strong in equipment manufacturing, but also strong in consumer goods production, and therefore improve people’s livelihood.