Why this is important to Wisconsin businesses: A new government report emphasizes the importance of growth in innovative, high-tech products.
Founded in 1952, the China Council for the Promotion of International Trade (CCPIT) is a national foreign trade and investment promotional agency. In February, CCPIT's Research Institute released the “Report on the Development of China's Consumption Market in 2018.” This report provided a detailed summary on the characteristics of China's consumption in 2017 and gave a comprehensive interpretation of consumer trends in 2018. According to the report’s predictions, rising consumption levels, improving quality of growth, and enhancing the role of economic development will be the three prominent highlights of 2018 consumption.
The report pointed out that innovative products and the consumption of services are the main focal points of upgrading structural consumption in 2018. As artificial intelligence, the internet, cloud computing, and big data technology are maturing, these technologies have been applied to traditional furniture, household appliances, and automotive products. Innovative durable consumer goods have significant room for growth.
According to CCPIT estimates, food, clothing and other material consumption accounts for just over 43 percent of overall consumption by Chinese residents. This number is much higher than in the U.S., where it is just over 32 percent. As Chinese income levels rise, material consumption as a percentage of total consumption will decrease. In 2018, in the sectors of traffic and communications, education, culture and entertainment, and the medical insurance spiritual consumption field, expenditures as a percentage of total consumer spending are projected to be about 34 percent.
As consumption continues to grow, its fundamental role in economic development is further enhanced. The report shows that among the three areas of consumption, investment and exports, consumption becomes the leading force of economic growth, as it contributes to both total GDP and the GDP growth rate. The contribution rate of consumption throughout the year remained over 60 percent.
Structural optimization of consumption will cause economic structural improvement. With the development of the mobile internet, the consumer market has undergone tremendous changes. Against the background of the supply-side reforms put forth by the state, advancement of consumption has become the main focus in the past three years. However, the heightening of consumption in China shows diversification and individualization. In 2018, with the internet, the internet of things and widespread artificial intelligence, boundless online and offline fusion will be the trend. Data formed through consumer demand will transmit to upstream industry sectors via efficient supply chains; simultaneous innovation and personal customization will begin to prevail. Consumer trends are expected to have a more prominent effect on production.