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By Wang Nian, Research Institute of Market Economy, DRC

Research Report, No.283, 2021 (Total 6348) 2021-9-23

Abstract: Since the beginning of 2021, China’s household consumption has turned from sharp decline to steady rise, and the recovery speed has revealed a good momentum quarter by quarter. It is expected that consumer competence would return to the normal level before the outburst of the pandemic. But it needs to be noted that structural imbalance still remains during the recovery, and there are big differences between urban and rural areas, between various regions, between different social groups and between different consumption items. Some cities and towns, including some first-tier cities and some areas in North and East China surface a weak spending power. The market for some service items and durable goods is slack. Some social groups with low income or with unstable employment have a low consumption capacity. These are the weak links hurdling the recovery of consumption power. The resurgence of the virus might delay the recovery of household consumption in the latter half of the year. In the short term, we need to focus on the weak links and implement targeted policies to address the mentioned issues. Meanwhile, we need to make policy arrangements for refining mid-to-long term market performance. We need to take both short- and long-term measures to stabilize households’ consumption, promote the continuous consumption spending and steadily unleash the potential of domestic demands.

Keywords: consumption performance, hold up consumption, weak links