By Wang Wei, Wang Qing, Liu Tao and Wang Nian, Institute for Market Economy, DRC

Research Report, No.360, 2022 (Total 6874) 

Abstract: Since the second quarter of 2022, the role of consumption as the main driving force of economic growth has weakened significantly by the impact of the pandemic beyond expectation and the triple pressure of demand contraction, supply shock and weakening expectations. An unfavorable situation has emerged in which consumption’s positive function to the economy has turned negative, which has become an urgent problem that needs to be addressed in order to stabilize the economy. A package of measures aimed at stabilizing growth have been launched, with a particular focus on promoting consumption, the effects of which are gradually emerging. However, residents' consumption expectations and confidence are still not out of the historical low. Apart from car consumption, expectations for the growth momentum of various goods and services consumption, such as food and beverages, are still lacking. To this end, it is suggested to focus on major consumption that account for a high proportion and has strong driving effect, such as the consumption of housing and transportation, service consumption, urban consumption and social group consumption, focusing on both long- and short-term consumption and making supply and demand to work together. It is necessary to roll out a slew of measures to promote consumption as soon as possible, so as to strongly stabilize and boost consumption expectations, promote consumption recovery and release its potential, further stimulate new momentum in consumption, and form a more powerful support for stable economic growth in the fourth quarter and the coming year.

Keywords: promote consumption, main driving force, a slew of policies