China turns to rural tourism and smart appliances to boost consumption

China Implements Measures to Promote Sustainable Development Goals

Introduction

BEIJING — The Chinese government has introduced 20 measures aimed at supporting tourism, promoting the consumption of electric cars and smart appliances. These measures are part of China’s commitment to achieving the Sustainable Development Goals (SDGs) and ensuring sustainable economic growth.

Support for Tourism and Sustainable Consumption

The measures announced by the central government are not only aimed at consumers but also at suppliers, providing guidance on areas of focus. Xu Hongcai, deputy director of the Economics Policy Commission at the China Association of Policy Science, emphasized the importance of stabilizing spending on expensive items while addressing weaknesses in rural areas.

Promotion of New Energy Vehicles and Smart Homes

One of the key areas of support is the purchase of new energy vehicles, including battery-powered and hybrid cars. In addition to tax breaks, the government is also encouraging the installation of battery charging stations to lower costs for electric car drivers. The measures also promote the adoption of smart home technologies, which are environmentally friendly and can be controlled through smartphone apps.

Boosting Rural Consumption

The government has highlighted the need to boost consumption in rural areas and the mass market. Specific measures include subsidizing trade-ins for smart household appliances, improving delivery services, and promoting rural tourism. Li Chunlin, deputy director of the National Development and Reform Commission, emphasized the importance of helping consumers spend wisely, buy high-quality products, and avoid illegal schemes.

Challenges and Opportunities

China faces the challenge of shifting its economic model towards consumer-driven growth, as the country has traditionally favored an investment-led approach. Efforts are being made to increase consumer loans and give them a greater share of bank loans. The government aims to enable more low-income groups to enter the middle class, thereby reducing income inequality.

Impact on Middle Class and Consumer Confidence

According to the Boston Consulting Group, only one-third of China’s population is considered middle class, with the majority having lower disposable income. While rural households have seen an increase in median disposable income, it still remains significantly lower than that of urban households. The lack of consumer confidence and uncertainty about future income have affected retail sales in China.

Promotion of Domestic Tourism and Cultural Activities

Since the lifting of Covid restrictions, domestic tourism has rebounded quickly in China. The government is encouraging employers to provide more paid days off and promoting off-peak vacations. Concerts, sports events, and other cultural activities are also being promoted to stimulate consumption.

Absence of Nationwide Consumption Vouchers

Unlike the US and Hong Kong, China has decided against implementing nationwide consumption vouchers. Economists attribute this decision to limited government funds and the government’s unfamiliarity with direct cash transfers to consumers. However, some local governments may experiment with consumption vouchers.

Conclusion

The measures introduced by the Chinese government demonstrate its commitment to achieving the SDGs and promoting sustainable economic growth. While challenges remain, efforts are being made to boost consumption, support rural areas, and enhance consumer confidence. The government aims to shift towards a consumer-driven economy and reduce income inequality.

SDGs, Targets, and Indicators

1. SDG 8: Decent Work and Economic Growth

   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product (GDP) growth per annum in the least developed countries.
   • Indicator 8.1.1: Annual growth rate of real GDP per capita.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries.
   • Indicator 9.2.1: Manufacturing value added as a proportion of GDP and per capita.

3. SDG 11: Sustainable Cities and Communities

   • Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.
   • Indicator 11.6.2: Annual mean levels of fine particulate matter (e.g., PM2.5 and PM10) in cities (population weighted).

4. SDG 12: Responsible Consumption and Production

   • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
   • Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.

5. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Indicator 13.2.1: Number of countries that have communicated the strengthening of institutional, systemic, and individual capacity-building to implement adaptation, mitigation, and technology transfer.

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Source: cnbc.com

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