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Concerned About The Factors That Affect The Development Of China'S Consumer Market

2010/9/10 9:23:00 28

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Recently announced

statistical data

It shows that the total retail sales of consumer goods in China in July amounted to 12253 billion yuan, up 17.9% from the same period last year, down 0.4 percentage points from last month, and the growth rate of consumption showed a slowdown.

Under the stimulation of the policy of replacing the old with new cars, going to the countryside and home appliances to the countryside, China's consumer market is booming.

But with the passage of time, the policy effect is bound to weaken gradually.

On the whole, the following four factors will have a slight impact on the fast growth of the consumer goods market in the second half of the year, which should arouse our attention.

- residents' income increased slowly.

The keynote of China's economic development policy this year is "expanding domestic demand and adjusting structure", and its core is improving.

Consumption level

In particular, the expansion of consumer demand.

From an economic point of view, the most important factor in determining consumption is not a temporary stimulus to the immediate policy, but a steady increase in the income of the residents.

Only when residents' incomes continue to increase can they make the consumption demand continue to grow. Only then can we expand the pulling effect of consumer demand on economic growth, and ultimately promote the pformation of economic structure from external demand to domestic demand.

Because of this, raising the income of residents has become the most popular topic of attention this year.

For a long time, the income level of residents in China has been relatively low.

The proportion of labor remuneration in national income is also decreasing year by year, from 50% in 2003 to 40% in 2006.

The growth of residents' income is not only lower than economic growth, but also lower than the growth of living expenses in recent years, such as education, housing, medical treatment, schooling and so on. This situation compels most residents to spend significantly on living expenses, which restricts the consumption ability of low-income residents.

Only the steady increase of residents' income is the root and source of improving social consumption ability.

The impact of price on the consumer market.

Since the beginning of this year, the price fluctuation of agricultural products has been increasing one after another.

In July, CPI rose 3.3%, hitting a new high in the past 21 months. Food prices rose by 6.8% over the same period last year. Food prices contributed more than 75% to new price increases.

It can be seen that the main reason for the rise of CPI in July is the price of food based on agricultural products.

In the first half of this year, prices of garlic, mung beans, ginger and other agricultural products were higher and higher.

In recent months

CPI

The increase has been increasing month by month, especially the increase in prices of some basic commodities such as grain and vegetables will obviously lead to higher living costs and increased consumption expenditure.

Although China's autumn grain is on the market soon, it is possible to slow down the inflation factor in the second half of the year. But considering the factors affecting the agricultural production and the increasing seasonal consumption demand this year, it is difficult to predict the overall level of agricultural product prices on the current basis, which will be one of the potential factors that will affect consumption in the future.

If the increase of residents' income is largely offset by the expense caused by rising prices, it will have an adverse effect on consumption expectations and squeeze out other consumption, which will further affect the sustained growth of consumer demand.

The impact of the new property policy on the consumer market.

The adjustment of mortgage policy has a positive impact on the long-term development of the consumer market.

The downward trend of housing prices will enable more consumers to afford housing, and will lead to the growth of related consumer goods such as construction, decoration, furniture, household appliances and so on. At the same time, the fall in housing prices will also release other consumer demand which is oppressed.

But in the short term, after the introduction of the new property policy, most buyers are in a wait-and-see state, and the price has not declined significantly.

The high housing price has not only reduced the sales volume of houses, but also affected the consumption of related consumer goods, such as architecture, decoration, furniture, household appliances and so on.

In addition, due to the increase of the down payment ratio and interest rate, some consumers will continue to accumulate first payment, or increase interest expense, and squeeze other consumption needs.

As China continues to strengthen the regulation and control policy of the real estate industry, the current buyers' psychology is serious. Most people believe that house prices will fall. In the second half of this year, they may continue to postpone the purchase plan in the second half of the year.

This shows that housing and related consumption will be difficult to improve in the coming period.

This will obviously have a lasting impact on other industries.

Taking buildings and decorating materials as an example, the retail value in June is 6 billion 500 million yuan, up 34% in June, and the retail value is down to 5 billion 900 million yuan in July, with a year-on-year increase of 27.6%. No matter the absolute value or the growth rate, there are signs of decline.

If the sales volume of the real estate market has not been enlarged in the second half of this year and the market downturn continues, the impact on the related consumer goods market in the near future needs to be noticed.

- the effect of consumption policy has been gradually weakened.

In order to cope with the financial crisis and expand domestic demand, in 2009, China implemented a series of policies, such as replacing old cars, going to the countryside, home appliances to the countryside, and so on, so as to adapt to the residents' thirst for household electrical appliances. The rapid release of consumer demand greatly stimulated the consumption of the market, and the consumer market showed a prosperous situation.

Taking the automobile industry as an example, automobile consumption has played a great role in stimulating the consumer market since the last year, with the combined effect of many favorable policies such as the reduction of small vehicle purchase tax, the car going to the countryside, and the replacement of old ones. This has effectively supported the rapid growth of the total retail sales of consumer goods.

According to the statistics of the China Association of automobile manufacturers, in the first half of this year, China's automobile production and sales volume reached 8 million 927 thousand and 300 and 9 million 16 thousand and 100 respectively, up 48.84% and 47.67% respectively from the same period last year, all of which reached the highest historical record and continued to rank the number one place in the world.

However, with the acceleration of automobile production, the increase of supply and inventory, and the relative reduction of consumption demand, the driving effect of policy on the car market has obviously weakened. The performance of the automobile market in the first half of this year is analyzed monthly, and it is easy to find its characteristics of "high before and after low" and "high opening and low walking".

In March this year, the number of automobile production and sales exceeded 1 million 700 thousand, after a record high, from April, the automobile production and sales ratio has been showing a downward trend.

From 1 million 500 thousand vehicles in April to 1 million 400 thousand in June, it fell to about 1200000 in July, and production and sales volume reached a new low.

Analysts believe that this shows that the automobile market is likely to enter the growth inflection point, and even into a downward channel.

Therefore, as another consumer goods in China's residents' consumption, besides the house, the impact of the change and trend of the automobile consumption market in the second half of this year on the trend of the consumer market is obviously noteworthy.

To sum up, in the current situation of China's declining investment and export facing many variables, the most fundamental way to maintain sustained and steady growth of the national economy is to expand domestic demand, improve national consumption capacity, enhance the stimulating effect of consumption on economic growth, and take consumption as the main driving force for economic development.

In the long run, with the improvement of residents' consumption income and the upgrading of consumption structure, consumption will surely maintain a rapid growth trend.

But in the short term, the impact of the above four factors on the consumption in the second half of the year is noteworthy. As long as the local governments take full attention and take the necessary measures to promote the income of urban and rural residents, increase the intensity of farm machinery, home appliances to the countryside, stabilize the real estate market, promote the consumption of durable consumer goods such as automobiles and other means, and comprehensively respond to them, we believe that the consumer market in the second half of this year will still maintain a relatively high growth rate.