SCIO briefing on China's economic performance in Q1 2025

South China Morning Post:

Can you comment again on consumption in the first quarter? In the face of the China-U.S. trade war, what measures will be taken to boost domestic demand and ensure steady economic performance? Thank you.

Sheng Laiyun:

Consumption affects both people's well-being and economic development. The CPC Central Committee and the State Council have placed a high priority on expanding consumption. Both the Central Economic Work Conference and this year's government work report list boosting consumption and comprehensively expanding demand as top priority among this year's key economic tasks. As we all know, on March 16, the General Office of the CPC Central Committee and the General Office of the State Council jointly issued a special action plan to boost consumption, providing policy support for further boosting consumption. Based on current situation, these policies are continuously taking effect and are delivering remarkable results. The consumer market now shows the following characteristics:

First, market sales are steadily picking up. We just released the main data on retail sales of consumer goods. In the first quarter of this year, total retail sales reached 12.5 trillion yuan, up 4.6% year on year, 1.1 percentage points higher than last year, with growth month on month. In March, total retail sales of consumer goods increased 5.9% year on year, 1.9 percentage points higher than in January and February.

Second, retail sales of commodities are growing rapidly. As I mentioned earlier, supported by policies such as implementing major national strategies, building up security capacity in key areas, driving large-scale equipment renewals and promoting trade-ins of consumer goods, related consumer goods have maintained double-digit growth. This reflects the continuous improvement in market sales.

Third, consumption of consumer services is growing rapidly. Based on first-quarter data, under the support of policies for boosting consumption, the growth of service consumption has experienced rapid growth. In the first quarter, retail sales of services grew 5% year on year, 0.4 percentage point higher than that of commodities. Consumption related to the upgrading of the consumption structure grew even faster, maintaining double-digit growth. In the first quarter, per capita expenditure on transportation and communication rose 10.4% year on year, while per capita spending on education, culture and entertainment increased 13.9%. In addition, holidays such as the Spring Festival and Qingming Festival led to a significant increase in travel, with travel-related spending on consumer services maintaining double-digit growth. In the first quarter, per capita spending on consumer services rose 5.4% year on year, accounting for 43.4% of total per capita consumption expenditures, 0.1 percentage point higher than the same period last year. Consumption of consumer services is a crucial area for supporting consumption growth in the future, with significant development potential and substantial room for expansion.

Fourth, new growth drivers for consumption are continuously being unleashed. With the accelerated application of big data and AI, new consumption scenarios are constantly being created and expanded, such as livestreaming commerce, instant retail, the nighttime economy, digital consumption, and AI-powered games. In addition, cultural consumption has grown rapidly. The continued popularity of "Ne Zha 2" is fresh in everyone's mind, with box office revenue already exceeding 15 billion yuan. These continuously expanding new consumption scenarios and constantly innovating new consumer products not only demonstrate the innovative vitality in China's consumer market but also the growth prospects of emerging consumption patterns.

Overall, consumption continued to improve during the first quarter of this year, bolstered by supportive policy measures. Of course, we also know that consumer spending is directly tied to income. To vigorously boost consumption, we must increase people's purchasing power. Next, we will follow the decisions and plans of the CPC Central Committee and the State Council by earnestly implementing the special action plan to boost consumption. We will actively stabilize employment, increase incomes, reduce burdens and enhance people's spending power. We will vigorously increase the high-quality supply of goods and services, continuously unleash consumption potential, constantly improve the consumption environment, encourage people to spend, and promote the sustained and positive development of the national economy. Thank you.