Yicai:

What are the highlights for the consumer data from the first quarter? During the recent Qingming Festival holiday, both the number of trips taken and tourism consumption achieved double-digit growth compared to the same period in 2019. What are the positive and effective supporting factors for subsequent recovery of consumption?

Sheng Laiyun:

Thank you for your questions. The changes in the consumer market are indeed one of the well-performing areas in economic operations for the first quarter, with quite a few highlights. The consumption data introduced just now shows that retail data grew by 4.7%, and the growth rate of service consumption was also relatively fast. Moreover, the stable growth of consumption is an important source of support for economic growth. As I mentioned earlier, with GDP growth, the contribution rate of domestic demand is 85.5%, of which consumption contributes 73.7%. This demonstrates that consumption indeed played an important supporting role in economic growth in the first quarter.

Regarding the good performance and characteristics they have shown, I believe there are a few points you can pay attention to.

First, overall consumption of physical goods has been relatively stable. The total retail sales of consumer goods increased by 4.7% in the first quarter to surpass 12 trillion yuan, marking a relatively high level for the first quarter. The physical goods consumption of residents, including food consumption, daily necessities consumption and some housing-related consumption, has also remained relatively stable. Therefore, the overall physical goods consumption of residents is relatively stable.

Second, service consumption has grown relatively fast. In the first quarter, service retail sales increased by 10%, which is 6 percentage points higher than that of goods retail. From the residents' perspective, per capita service consumption expenditure grew by 12.7%, which is also 4.4 percentage points higher than the 8.3% growth in the overall consumption of residents. Besides, the share of residents' service consumption expenditure has reached 43.3%, an increase of 1.6 percentage points compared to the same period last year. Service consumption is accelerating.

Third, online consumption remains robust. As I also announced earlier, the online retail sales of physical goods has increased by 11.6%. What's more, driven by the adoption of new technologies, online sales models are constantly innovating and setting new sales records.

Fourth, there has been continued improvement in consumption upgrade. After resolving the issue of ensuring adequate food and clothing, and then achieving a moderately prosperous society in all respects, there has been an accelerated increase in consumption for the purpose of development and enjoyment. This aligns with the major trends of consumption and industrial upgrading. This is also why tourism has remained popular this year and why there's a fast growth rate in high-level consumption areas such as education, training and elderly care. From a retail perspective, according to the data just introduced, sales of sports and entertainment goods have increased by 14.2%, and sales of communications equipment by 13.2%. From the perspective of residents, our expenditures on transportation and communications and on education, culture and entertainment have all seen double-digit growth, exceeding 10%. This indicates that the trend towards upgraded consumption is moving in a positive direction.

Fifth, holiday consumption continues to surge. During the Spring Festival and Qingming Festival holidays, both the number of travelers and tourism revenue exceeded the levels from 2019, with year-on-year growth rates in the double digits. Furthermore, from the north to the south and from the east to the west, various localities are continuously creating new internet-famous brands. This has propelled holiday consumption and significantly bolstered the recovery of the service industry and the economy.

Another notable characteristic is that green consumption is gaining popularity. Everyone is pursuing healthier and greener modes of travel. A very prominent feature is that, despite the declining trend in sales of fuel vehicles in recent years, sales of new energy vehicles have continued to be strong. According to data from the China Association of Automobile Manufacturers, new energy vehicle sales increased by more than 30% in the first quarter. Additionally, the penetration rate of new energy vehicles now exceeds 40%, with the latest data showing 41.6%, a 7.6 percentage point increase from the same period last year. All these aspects not only demonstrate sustained vitality in the consumption field but also present new trends in consumption development, therefore worth paying close attention to.

Looking to the future, the favorable conditions supporting consumption continue to increase. For example, policy support, including the policy for replacing old consumer goods with new ones, is expected to make a profound impact. Additionally, localities are creating consumer brands, improving consumption conditions and fostering an environment conducive to residents' consumption. The economy is also continuously warming up and improving, with residents' incomes and employment both on the rise, which is conducive to enhancing the capacity for consumption. Furthermore, consumer confidence is steadily recovering. So overall, taking these favorable conditions into account, our future consumer market is expected to continue to improve. Especially considering China's large population and the scale advantage of consumption, the vast market consumption potential also serves as a ballast stone for the continuous and stable improvement of the Chinese economy. Of course, we must also recognize that consumption ultimately depends on income support. Although income growth is recovering, the lingering impact of the COVID-19 pandemic in recent years means that income levels still need to continue to rise. While consumer confidence has been recovering for several consecutive months, the overall consumer confidence index remains below the critical value. These unfavorable factors remind us that we must continue to strengthen the foundation for economic recovery and improvement and enhance the capacity and confidence of residents' consumption, which is a long-term task. However, I remain optimistic about the continuous improvement and future prospects of consumption. Thank you.

Shou Xiaoli:

Thank you, Mr. Sheng Laiyun, and thank you to all the journalists that are present. That concludes today's press conference.

Translated and edited by Xu Xiaoxuan, Wang Yiming, Liu Jianing, Zhou Jing, Gong Yingchun, Wang Wei, Wang Mengru, Huang Shan, Yan Bin, Wang Qian, Liu Caiyi, Zhang Junmian, Ma Yujia, Guo Yiming, Wang Ziteng, Li Huiru, Zhang Rui, Yuan Fang, David Ball, Jay Birbeck, and Rochelle Beiersdorfer. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.