Ping An View:
Consumption has become a ballast stone to stabilize China's economy. However, due to the multi-point spread of the epidemic, the actual debt servicing burden of China's household sector is higher than that of major developed countries, the increase of residents' Preventive Savings after the rise of economic and employment uncertainty, China's consumption has insufficient endogenous recovery power, and further policies are urgently needed. At present, many places have issued consumption vouchers, but the total scale is within 10 billion, which is difficult to reverse the trend of low consumption. At present, it is necessary to introduce more large-scale consumption promotion policies, and the consumption of large items such as cars and household appliances may be an important starting point.
Why promote consumption? The proportion of final consumption expenditure in China's GDP and its year-on-year pull on GDP exceed 50% in most years. Consumption has become a "ballast" for stabilizing the economy, which depends on the stability of consumption. However, after the epidemic, China's consumption has been depressed. The first influencing factor is that the epidemic has suppressed the consumption scene, which is related to the sharp year-on-year decline in social consumption and May Day holiday consumption in April this year; Second, the actual debt repayment pressure measured by household sector debt balance / disposable income and annual debt service / disposable income is higher in China than in major developed countries such as the United States, Britain, Germany, Japan and so on; Third, the uncertainty of economy and employment has increased, and residents' preventive savings have increased. In the first quarter of this year, the "proportion of more savings" in the questionnaire survey of urban depositors by the central bank hit a new high since statistics began in 2002. Under the repression of the above factors, the impetus for the endogenous recovery of residents' consumption is insufficient, which needs policy guidance and encouragement, so as to give better play to its role of "ballast stone".
At present, many places have issued consumption vouchers, but the boosting effect on total consumption may be limited. Document No. 9 does not mention consumer vouchers. Experience in 2009 shows that the central government may be more cautious about issuing consumption vouchers at the national level. However, consumer vouchers have been issued in many places this year. Referring to the experience in 2020, the leverage ratio of consumer bonds is about 3.5. However, at present, the total scale of consumption vouchers issued is less than 10 billion, and due to the requirement of service life (usually within one month), subsequent consumption will be overdrawn; In 2021, the total retail sales of social consumer goods counted only physical goods and catering consumption reached 44.1 trillion. Only the scale of consumption vouchers issued at present has little marginal contribution to the recovery of consumption.
How to promote consumption? More consumption promotion policies are worth looking forward to. The consumption of large items such as cars and household appliances may be the focus of subsequent consumption promotion. In terms of automobiles, China implemented two rounds of large-scale automobile consumption stimulus policies from 2009 to 2010 and 2015 to 2017, both of which have achieved positive results. At present, the necessity and possibility of stimulating automobile consumption in 2022 are rising: first, automobile has become the most important item to drag down consumption, dragging down the total retail sales of Enterprises above the quota by 9.0 percentage points in April; Second, in addition to the proposal of "encouraging qualified areas to carry out new energy vehicles to the countryside" in Document No. 9, at present, many places have deployed automobile consumption stimulus policies; Third, there is still much room for improvement in China's car ownership, and the demand for replacement is also increasing. Various stimulus policies will help to release the demand for car consumption and underpin the economy. In terms of household appliances, from 2007 to 2012, China implemented a round of large-scale household appliance consumption stimulation, and the leverage ratio of financial funds to household appliance sales was about 8.9 times, with remarkable results. At present, Beijing, Guangdong, Zhengzhou and other places have begun to stimulate household appliance consumption, which may be expanded to more provinces and cities in the future.
