People choose products in a duty-free shop in Haikou, South China's Hainan province on Jan 26, 2023. [Photo/VCG]

Nation will deepen reforms to increase incomes, bridge urban-rural wealth gap

China will step up its policy support to increase consumer spending and unleash the country's purchasing potential, a key force that propels the nation's economic recovery and underpins its endeavors toward modernization and prosperity, experts said.

The policy push, including the removal of administrative restrictions in the housing and automobile markets, is among China's priorities in order to revive the vibrancy of its consumer market because the central leadership has identified insufficient domestic demand as an acute challenge facing the nation's economic and social development, especially after three years of COVID-19 disruptions.

Policymakers are also expected to deepen reforms to boost household incomes and bridge the wealth gap between urban and rural residents, as President Xi Jinping has emphasized the importance of expanding the country's consumption demand supported by stable income growth.

Experts said they believe that strong and sustainable development of the Chinese consumer market underscores the country's larger strategic move toward building the dual-circulation development pattern because a healthy and prosperous consumer market is an integral part of China's domestic economic circulation, which actively interacts with the global markets.

In his article published in April in Qiushi Journal, a flagship magazine of the Communist Party of China Central Committee, Xi urged the country to better coordinate the expansion of domestic demand and supply-side structural reform in order to enhance the strength and reliability of domestic economic circulation, increase its driving force and vitality, and boost its interaction with the international markets.

Xi also called on policymakers to form a complete domestic demand system as soon as possible, and establish and improve a long-term mechanism for expanding residents' consumption, so that residents can consume with a stable income, dare to consume without worries and are willing to consume due to the excellent consumption environment and strong sense of gain.

Consumption growth reflects people's increasing desire for a better life and is closely linked with the country's goal of achieving common prosperity and building a modern socialist country in all respects, which is why the central and local authorities have spared no efforts in introducing policies to boost consumption, said Fu Yifu, a senior research fellow at the Star Atlas Institute of Finance.