Additional moves to boost consumption of household items

China will adopt targeted measures to bolster consumer spending on household items, as part of the country's efforts to promote the recovery and expansion of consumption and sustain a sound momentum in economic activities, officials said on Tuesday.

Since the beginning of this year, China, by optimizing its various pandemic response measures, has been transitioning smoothly to a phase of less intense COVID-19.The country has also adopted an array of policy measures to spur consumer spending. Consumption is on a path to a steady recovery, said Sheng Qiuping, vice-minister of commerce, at a news conference.

China's retail sales of consumer goods rose 8.2 percent year-on-year in the first half of this year, with end-user consumption expenditure contributing to 77.2 percent of GDP growth, according to the National Bureau of Statistics.

As the policy effects will manifest further in the months to come, the rebound momentum of consumption will continue in the second half, and the fundamental role of consumption in promoting economic development will be better felt, Sheng said.

He also highlighted that consumption of household items involves various sectors and massive upstream and downstream enterprises, and has large market scale. However, due to multiple factors, consumer spending on home appliances, furniture and interior finish remained subdued.

NBS data showed that in the first half, retail sales of home appliances and furniture in key regions edged up by only 1 percent and 3.8 percent year-on-year, respectively, while that of construction materials dropped 6.7 percent.

Targeted measures to boost consumer spending, therefore, will be conducive to driving consumption growth and facilitating economic recovery, Sheng said.

According to the notice released by the Commerce Ministry and 12 other departments on Tuesday, localities where conditions are favorable are encouraged to give out subsidies to residents who purchase environmentally friendly home appliances, furniture and building materials.

Government support, business promotion and other favorable measures will be extended to encourage residents to carry out renovation and upgrading of their old houses, the notice said.

Financial institutions will be encouraged to strengthen credit support for home appliance consumption. Loan interest rates and repayment terms will be determined as appropriate. Approval procedures will be streamlined with better financial services and instant online handling, it said.

Financial institutions will be supported to scale up cooperation with home furnishing manufacturers, stores, decoration service providers, and provide financing support for upstream and downstream enterprises, the notice stated.

Hu Yanan, secretary-general of the residential industry branch of the China Building Decoration Association, said there is enormous potential to boost sales of household items given the vast number of houses in stock.

According to an NBS estimate, 420 million housing units are in stock in China; about 270 million of them are in need of renovation, suggesting huge demand.

China's residential decoration sector, excluding consumer spending on furniture and home appliances, boasts a market size worth over 5 trillion yuan. Therefore, relevant consumption should be boosted with greater government support so as to better drive economic growth, Hu said.

He Yaqiong, head of the consumer products industry department at the Ministry of Industry and Information Technology, said consumption of home-related items has become the second-largest household expenditure after cars.

Last year, the combined revenue of enterprises engaged in home appliances, furniture, lighting and hardware was 3.6 trillion yuan, and the figure was 1.35 trillion yuan for the January-May period this year, he said.