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By Wang Qing & Wang Wei, DRC

2017-8-16

After the economic development entered the stage of new normal, China’s economy is facing a pivotal period for cultivating and developing international consumer centers. Some mega-cities in China with bulk business dealings have already satisfied relevant conditions for the establishment of international consumer centers. However, in the course of pilot practice, these cities are confronted with a series of problems and obstacles, and they urgently need the government to strengthen strategic planning and accelerate system and mechanism innovation. Under such a landscape, the government needs to select some big cities and launch trials in setting up some flagship business centers while implementing preferential policies such as increasing market supply, fleshing out weak links, and improving commercial environment. The government needs to boost efforts in cultivating international consumer centers and encouraging them to become new engines and new carriers, propelling domestic consumption and promoting the optimization and upgrading of industrial structure in an opening up manner across the board.

Accelerating the construction of international consumer centers is of great significance. First, leading the new normal of economic development urgently calls for the cultivation of international consumer centers-based new driving forces. Second, deepening supply-side structure reform urgently needs international consumer centers as key drivers. Third, participating in the competition of global consumer market urgently needs international consumer centers as new carriers. Fourth, accelerating the construction of international mega cities and improving the quality of new urbanization urgently requires the international consumer cities to play a leading role.

China’s construction of international consumer centers has already possessed basic conditions. The consumer market in China has been developing rapidly, some large cities enjoy a strong consumer spending growth across the world with basic consumption agglomeration and innovation ability and have become large consumption cities with the potential to become international consumer centers. First, the scale of China’s consumer market has taken its place in the front ranks of the world, and consumer-driving forces are gaining momentum; second, the aggregation of high-end consumer resources has become accelerated; third, consumption-based innovation is playing a leading role; fourth, the construction of international consumer centers has made a start.

Some existing problems and obstacles remain to be solved for China in building international consumer centers. First, due to ineffective supply of goods and services, many consumers are inclined to go shopping in foreign markets; second, the infrastructure facilities to attract consumers are inadequate; third, some institutional and systematic arrangements have hindered the promotion of consumption upgrading and innovation motives.

Some policy options for building international consumer centers are raised as follows. First, we need to strengthen the supply-side reform and actively expand the supply of mid-to-high-ends of consumer goods, speed up the cultivation of burgeoning consumer industries and promote the integration- and innovation-based development of consumer sector. Second, we need to shore up weak spots, strive to build, in a proper manner, a number of new consumer shopping malls that can attract and draw over customers both from home and abroad, cultivate new carriers for consumption development, and improve the infrastructure facilities for international consumer centers. Third, we need to optimize the environment, encourage local governments to establish comprehensive law enforcement agencies, enhance the comprehensive regulation and management of production quality, food safety and market order, crack down the production and sale of fake goods in accordance with the law, promote the overall construction of social credit system, provide a safe and sound consumer market environment for both domestic and foreign consumers, and accelerate the cities environment with a global vision. Fourth, we need to step up the reform, further relax control over market access in the field of emerging consumer services such as health care, face-lifting, cultural creativity, and entertainment, simplify the qualification conditions and approval procedure, break the monopoly and encourage private capital to make investment. At the same time, we need to improve taxation policies which can stimulate consumption, safeguard the land use of the construction and reconstruction of urban business districts, further enhance the level of opening up of the service industry, improve the international consumption facilitation and establish the consumption statistics index system which can meet the demand of service industry development and reflect the actual consumption level. Fifth, we need to set up demonstration centers. The government needs to work out a reasonable layout from the state level, promote the development in a coordinated way and launch innovative pilot practice in large consumer cities with adequate conditions.