Among investment, exports and consumption — the key drivers powering China's economic development — consumer spending is well positioned to be the fastest-moving engine in the long run, a senior expert said, calling for stronger steps to further stimulate consumption.

Sufficient job creation, a robust and responsive supply-side ecosystem and new consumption models should be prioritized to bolster consumer spending, as outlined by the third plenary session of the 20th Central Committee of the Communist Party of China, said Chen Wenling, chief economist at the Beijing-based China Center for International Economic Exchanges, in an exclusive interview with China Daily.

Consumption, according to data from the National Bureau of Statistics, played a major role in propelling growth in the first half of this year, with final consumption contributing to 60.5 percent of China's economic expansion, or 3 percentage points to the GDP growth rate.

Despite the government's concerted efforts to boost domestic consumption, the much-anticipated rebound in consumer demand has yet to fully materialize, Chen said.

Total yuan-denominated deposits grew by 11.46 trillion yuan ($1.58 trillion) in the first half of 2024, with household deposits accounting for the majority, at 9.27 trillion yuan, according to data from the People's Bank of China, the country's central bank.

Household savings deposits have cumulatively increased by around 58 trillion yuan since 2020. This substantial buildup of savings suggests that consumers remain hesitant to unleash their purchasing power, Chen said.

Shoring up job creation and instilling a sense of income security will be instrumental in unlocking the full potential of domestic demand, Chen said, stressing that the plenum has laid out the long-term institutional mechanisms for ensuring employment.

Going forward, these reform measures will be delivered on the ground, which will enable the country to maintain a vibrant labor market over the long term while also allowing people to have a clearer view of their future income prospects, Chen said, adding that this, in turn, is expected to boost consumer confidence.

Chen also emphasized the pressing need to further upgrade the supply-side of consumption in order to better cater to the evolving demand of Chinese consumers.

China's ongoing manufacturing transformation has created a surge of homegrown brands characterized by improved quality, technological advancements and price advantages, including the burgeoning new energy vehicle sector, Chen said.

Chinese tech firm Xiaomi, for example, released its first self-developed new energy vehicle model SU7 in March, with prices ranging from 215,900 yuan to 299,900 yuan, and is aiming to sell 100,000 units this year.

So far, the company has received 100,000 units or a year's worth of orders, and it plans to ramp up production significantly to meet soaring demand.

The emergence of vibrant Chinese brands such as Xiaomi will be a key catalyst in unlocking the full potential of the country's vast consumer market, Chen added.

Moreover, new consumption models such as the trade-in program to replace old consumer goods with new ones should be further explored to revitalize the consumer market, Chen said.