By Wang Nian, Institute of Market Economy, DRC

Research Report, No.194, 2018 (Total 5469) 2018-11-16

Abstract: The economic operation in the first three quarters of 2018 generally remains stable. The role of consumption in promoting and supporting China’s economic development is becoming increasingly prominent and stable; the consumption structure is being optimized and new features and trend are emerging in the market. However, it needs to be noted that consumption growth slowed down in the first three quarters because of both mid- and long-term factors including the decline in residents’ income growth, inadequacy in efficient supply and the escalation of Sino-US trade frictions, and short-term ones such as the fast rise of housing prices and the sluggish demand for cars. In the short term, consumption development still faces downward pressure and some new uncertainties in the future. According to a comprehensive analysis, it is estimated that the growth rate of the total retail sales of consumer goods in 2018 will be around 7.0%. Thus, to maintain the stability of China’s consumption development and enhance a sound and stable economic operation, work needs to be done to comply with the long-term trend of consumption development, ensure residents’ income growth and their confidence and key efforts need to be made to reduce the risks brought by short-term uncertainties and accelerate the cultivation of new growth points in consumption.

Key words: consumption, circumstance analysis, short-term evaluation, policy options