(Yicai Global) Nov. 24 -- Spending by Chinese consumers has been the top driving force of China’s economic growth for the last eight years, contributing 64.8 percent to the country’s gross domestic product in the first three quarters, according to the latest data.

China’s total retail sales of consumer goods has nearly doubled since 2012, reaching CNY39.2 trillion (USD6.1 trillion) last year, Vice Minister of Commerce Wang Shouwen said at the recent fourth Hongqiao International Economic Forum. 2012 was the year when consumer spending outstripped investment for the first time since 2001.

There has been a rapid upgrade in consumption, Wang said. For instance, in 2012 less than a quarter out of every 100 urban households owned a car, but this was nearly half, 44.9, in 2020. And the proportion of spending on services was 52.3 percent of a person’s total expenditure in the first nine months, 2.4 percentage points more than the same period last year.

New forms of spending, such as online retail and mobile payments, have also helped loosen purse strings. Online retail sales surged to CNY11.8 trillion (USD1.8 trillion) last year from CNY1.3 trillion in 2012, with an annual average growth rate of over 30 percent. The value of exports also almost doubled to USD226.8 billion in 2020 from USD119.5 billion in 2012.

Consumer spending, however, has yet to fully recover from the impact of the Covid-19 pandemic, Wang said. China needs to do more to facilitate the integration of online and offline shopping, balance urban and rural development and unblock domestic and international trade hubs.

Boosting consumption also calls for focusing on the weak points, said Wei Jianguo, former vice minister of commerce and the current vice chairman of the China Center for International Economic Exchanges. For instance, the proportion of GDP that is spent on logistics is very high, at around 13 percent. Further reducing transportation costs can ease the pressure on consumers, so as to spur consumption.

Editors: Xu Wei, Kim Taylor