Young people wait in front of snack stalls in a night market in Zhengzhou city, Central China's Henan Province, on April 2, 2023. As the weather warms up, many provinces and cities across the nation have stepped up efforts to boost their night economies in order to spur consumption growth. Photo: VCG

China is speeding up its drafting of policies to further promote the domestic consumption recovery and expansion, the National Development and Reform Commission (NDRC) said on Wednesday, after the world's second-largest economy is off to a good start in its economic recovery with better-than-expected performance in the first quarter. 

Policies released by the NDRC will provide targeted guidance for the continued development of consumption in various areas, which is expected to become the major engine to drive a full-year economic recovery, analysts noted.

First-quarter retail sales expanded 5.8 percent year-on-year, and the contribution of final consumption to economic growth reached 66.6 percent, a significant increase over the whole of last year.

Meng Wei, spokesperson for the NDRC, said that the consumer market got off to a good start in the first quarter, laying a solid foundation for the full-year recovery and expansion of consumption. However, the momentum of a sustained rebound in consumption should still be boosted.

Targeted policies will focus on stabilizing bulk consumption, improving services consumption and expanding rural consumption, according to the needs of different consumer groups, in a bid to promote steady growth in consumption, Meng noted.

"The release of these policies will play a role in strengthening confidence and stabilizing market expectations. As consumption power remains strong while people are cautious about spending, a better consumption environment should be created," Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Wednesday.

Meng said as auto consumption is a "big driver" of overall consumption, the NDRC will speed up the construction of charging piles and urban parking facilities, as well as encourage auto companies to develop models more suitable for use in rural areas.

Raising incomes is an important basis for promoting consumption. The NDRC will work with relevant departments to promote the optimization of employment, income distribution and a virtuous circle of consumption.

In addition, it will strengthen employment policies, improve the incomes of urban and rural residents, and strive to ensure supplies and price stability of basic consumer goods, Meng said.

Cong noted that the potential of the rural market is still huge, and China should continue to increase the infrastructure construction of rural services and provide better-quality goods. Expectations for the property market should be further stabilized, Cong added.

According to data released by the National Bureau of Statistics, accommodation and catering revenues reached 451.1 billion yuan ($65.4 billion) in the first quarter, up 13.6 percent year-on-year. 

"In terms of tourism, catering and other high-quality consumption sectors including healthcare and pensions, targeted policies are expected to improve the quality of services and stimulate consumer demand," Li Changan, a professor at the Academy of China Open Economy Studies at the University of International Business and Economics, told the Global Times on Wednesday.

Cong also noted that the street vendor economy should also be further supported. 

For instance, Zibo, a city in East China's Shandong Province, has gone viral on Chinese social media for its local specialty barbecue. The city has set up special tourist trains and bus routes to attract visitors.

Data from online travel agency Tongcheng Travel showed that in the first 18 days of April, hotel reservations for Zibo increased more than five times year-on-year, and those for its scenic spots surged more than 20 times. 

"Consumption is a main engine of GDP expansion, and its growth momentum will remain stable, with the contribution to economic growth reaching about 60-70 percent this year,' Cong noted.

China's first-quarter GDP growth was better than expected at 4.5 percent year-on-year.
 
Market confidence has been significantly boosted, consumption and investment have rebounded, and employment and prices remain generally stable, which fully demonstrate the resilience, potential and vitality of the economy, reflecting the long-term positive fundamentals as well as vigorous vitality of China's economy, Wang Wenbin, spokesperson of the Foreign Ministry, told a press conference on Wednesday.

"China's economy is recovering and improving, which provides more opportunities for the development of the world," Wang noted.