Consumption will be top catchphrase ahead
China should take prompt and effective measures to shore up consumption amid COVID-induced uncertainties in 2022, as "stabilizing growth" will remain the common thread running through this year's economic playbook, industry experts said.
The comments came as total retail sales registered a robust 12.5-percent rise last year to over 44 trillion yuan ($6.93 trillion), according to the National Bureau of Statistics' latest data on China's key economic gauges last year.
Domestic demand-triggered growth accounted for 79.1 percent of last year's economic growth, which indicates the significant role of the domestic market, said Ning Jizhe, head of the NBS.
Slowing growth in the final months of the year, though, suggested challenges ahead. For instance, December consumption－conventionally perceived as a year-end booster－grew just 1.7 percent year-on-year, down 0.18 percent compared with the previous month.
"It's fair to say that GDP growth in the fourth quarter is above market expectations," said Jason Yu, general manager of consultancy Kantar Worldpanel in China. "But the hovering domestic COVID cases have made the consumption rebound somewhat lackluster, notably dealing a blow to the catering and tourism sectors."
Data showed retail spending in cities and rural areas remained largely balanced last year. The trade-up trend continued to gain steam, with expenditures on big-ticket items such as jewelry jumping nearly 30 percent year-on-year.
Implementing the dual-circulation development pattern has shown that consumption is the main driving force of economic recovery, said Fabrice Megarbane, president of North Asia Zone of L'Oreal Group & CEO L'Oreal China. The company registered double-digit growth in China in the quarter ended September 2021.
"In China, we are encouraged by fast-growing consumption power and consumption appetite inspired by aspirations for a better life," Megarbane said. "As beauty becomes a beacon industry and leads consumption, we wish to see more policies on consumption boost and upgrade."
Internet-based retail revenue climbed 14.1 percent to 13.1 trillion yuan. Physical goods traded online accounted for around a quarter of all retail sales at 10.8 trillion yuan.
Yu said he expects e-commerce growth to ease further in the fourth quarter, a trend that calls for extra means to "stabilize growth".
Over the weekend, the National Development and Reform Commission released a notice aimed at boosting consumption as the Spring Festival holiday approaches, amid attempts to maintain effective contagion controls.
Multiple measures should be taken to meet residents' festive needs, including ensuring the supply of daily necessities, providing more contactless services and helping senior citizens enjoy convenient transportation to reunite with their families, as per the directive. It also set out policies to upgrade online festival-related consumption and expand consumption in rural areas.
Haagen-Dazs, an iconic ice cream brand under General Mills, recently debuted a seasonal gift combo in which the ice cream features shapes familiar to mahjong－a traditional game enjoyed by Chinese during family reunions.
"In this vast consumer market, it's important for our brand to have high China relevance and resonate with the local culture," said James Chiu, vice-president and China managing director of General Mills. "Spring Festival is a critical occasion to bond with customers and is part of the national cultural tide."
Spring Festival shopping will be a critical juncture that determines the overall first-quarter performance for many companies, Yu added.
"As much of the blame for the overall economic pressure could be laid at the feet of COVID-19, it's therefore critical for governments and enterprises to prevent and control the contagion in a more precise manner in order to stabilize growth," he said.
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