Increasing people's income key to unleashing consumption

Updated: 2022- 01- 26

Workers select and package navel oranges in Huichang county, Ganzhou city, Jiangxi province, on Nov 7. ZHU HAIPENG/FOR CHINA DAILY

An expert and entrepreneurs' forum has proposed that the country better leverage the role of domestic demand in driving economic growth and called for measures to increase people's incomes and spending power to unleash consumption potential.

To cope with the pressures of demand contraction, supply shocks and weakening expectations, China must attach great importance to stabilizing residents' incomes and improving income levels, the experts said.

In 2021, China's per capita disposable income reached 35,128 yuan ($5,550), up 9.1 percent year-on-year in nominal terms, faster than the growth rate of per capita GDP. Wage income, which accounted for the majority of people's total incomes, increased 9.6 percent to nearly 20,000 yuan, becoming an important driving force for personal income growth. It is worth noting that the average monthly income of migrant workers reached 4,432 yuan, with annual income exceeding 53,000 yuan.

Therefore, the country needs to do more to stabilize people's incomes. In 2021, the growth rate of per capita transfer net income of urban and rural residents was only 5.8 percent, lower than the growth rate of total income in the same period.

China should further enhance wage and business incomes by stabilizing market entities. It should not only pay attention to the number of market players, but also to their activities. More efforts should be made to improve the business environment and cut taxes and fees. In particular, policy stability should be enhanced so as not to harm the expectations of market players.

The country should also increase employment capacity by supporting the development of labor-intensive manufacturing and service industries.

Restrictive and discriminatory employment policies should be canceled. Given the large number of workers in the gig economy in China, it is necessary to improve policies and institutional arrangements to protect their employment rights and interests.

The country needs to further improve the basic public service system and change the pattern of the low growth of transfer income.

All these measures will unleash consumption potential, which is an important driving force for economic and social development.

Source: China Daily