Why hasn t the middle income group become a driving force for consumption?

Mondo Cars Updated on 2024-02-01

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Recently, Wang Yiming, vice chairman of the China Center for International Economic Exchanges, said in the CCTV News "News One Plus One" columnChina's middle-income group has exceeded 400 million, but most of them have just crossed the middle-income threshold. This group is still relatively vulnerable, and once it encounters external shocks, this part of the population is also the most directly affected, including the impact on income, and even on the employment of some people, so this part of the population is often more vulnerable in terms of physical feelings.

Fragility is just a visual representation of experts, or a pessimistic description of the overall strength of the middle-income group. The same middle-income group has different income strengths. Residents at the upper end of the middle-income group have relatively strong economic strength, relatively strong spending power, and strong ability to cope with various risks. On the contrary, it can only be compared with people other than the middle-income group, and only those with low incomes are more secure in life, but it cannot achieve liberalization and spontaneity in consumption.

This also means,The 400 million middle-income group is still in the low-level middle-income stage, and the proportion of residents near the lower limit of the middle-income is too large, the proportion near the upper limit is too small, and the proportion of the middle limit is also significantly low. If the proportion of middle-income groups in the upper middle and upper reaches is higher, not only will the "olive-shaped" pattern of social wealth distribution be more obvious, the social stability will be stronger, the consumption capacity will be more sufficient, and the role of consumption in stimulating economic growth will be more powerful.

To build a new development pattern and realize the domestic cycle, consumption plays an extremely important role. Where does the source of consumption come from, neither the rich nor the poor are the main force, but the middle-income group is the main force. Only by tapping the consumption potential of the middle-income group can the role of consumption in stimulating economic growth be brought into full play. It is precisely because the proportion of residents in the middle-income group who are close to the lower limit is too large, and the volatility of consumption is more obvious, and the change of any factor may have an impact on their consumption confidence, consumption psychology and consumption motivation. Then, the negative effect and impact on consumption-driven economic growth will also be great.

Judging from the situation since the outbreak of the epidemic, although the epidemic has been fully controlled and the impact of the epidemic on economic and social life has ended, the psychological impact of the epidemic on the majority of residents is still relatively large. The impact is especially greater for those living near the lower middle income range. Many residents can only be satisfied with the most basic consumption, but do not dare to consume more actively, resulting in a relatively large impact on the power of consumption. If we can continuously raise the income level of residents, so that residents' income can shift to a higher middle-income range, and greatly increase the proportion of middle-income residents with upper limits, the role of consumption in stimulating economic growth will be significantly enhanced.

The fact is that among the middle-income group, the confidence in consumption is not the same between those with higher income levels and those with lower income levels, and there is also a relatively large gap in the motivation of consumption. Many residents near the lower end of the middle-income income group have little difference from the consumption concept of low-income people, such as housing loans, children's schooling, and medical treatment for the elderly, which are all key issues for them to consider, and they are also the main aspects of income distribution. For the sake of spending in these areas, they can indefinitely suppress spending in other areas, making it difficult to make a significant difference in consumption. On the contrary, those residents who are near the upper end of the middle income will be much more open and emotional in terms of consumption concepts and ideas, and shopping, travel, fitness, beauty, etc., will become their important choices. The scope of consumption has also shifted from basic living consumption to general consumption, spiritual consumption, health consumption, leisure consumption, entertainment consumption, etc., and the intensity of consumption is relatively large.

It is precisely because of this that while emphasizing the role of consumption in driving economic growth,How to raise the income level of residents is an issue that needs to be seriously considered and solved. The starting point to solve the problem is to develop the economy, strengthen the real economy, strengthen the manufacturing industry, and safeguard the interests of small, medium and micro enterprises. Real estate companies need to resolve risks, and urban construction needs to continue to be carried out, but all of this is not mainstream and is not enough to play a positive role in residents' consumption. Only when residents are fully employed can they ensure the stability of consumption, and only when they have money in their hands can they have confidence in consumption. The real economy, especially the manufacturing industry, is the most stable and solid foundation for solving the employment of residents. The experience of reform and opening up over the past 40 years and more also tells us that only by developing the real economy can China's economy be stable and reliable, and the employment of residents can be guaranteed. Otherwise, there will be problems. If employment is not guaranteed, where will the power of consumption come from, how can we give full play to the role of consumption in stimulating economic growth, and how can we establish an "olive-shaped" pattern in society. Emphasizing only the number of middle-income groups and not emphasizing the distribution of middle-income groups is blind, dogmatic, and a manifestation of rigid thinking. The middle-income group is not only rolling, but also mobile, and it is in need of sesame seeds to blossom. Only in this way can consumption be upgraded step by step, and the role of consumption in stimulating economic growth can be continuously increased.

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