Core Viewpoint - The article emphasizes the need for China to address the structural imbalance in its economy, particularly focusing on the consumption shortfall, to maintain sustainable economic growth and modernization [3][4][5]. Economic Structure and Growth - China's economic growth has recently exhibited a "strong supply, weak demand" characteristic, where insufficient demand, especially in final consumption, has become a key constraint on economic growth [4][6]. - The article highlights that the structural imbalance in the economy is not only due to short-term factors but also has deeper systemic roots related to the allocation of public resources [4][7]. Consumption Shortfall - The consumption shortfall is identified as a critical issue, with the need to address it from a long-term perspective rather than merely responding to its immediate effects [4][10]. - The article suggests that the consumption rate in China is significantly lower than that of other G20 countries, indicating a structural weakness in consumer spending [24][33]. Policy Recommendations - The article proposes several policy recommendations for the "14th Five-Year Plan" period, including optimizing public resource allocation to enhance household income and stimulate final consumption [14][15]. - It emphasizes the importance of reforming the household registration and land systems to support urban-rural integration and improve consumption capacity [14][15]. Supply-Side Improvements - The article notes that while supply-side capabilities have improved significantly, the persistent weak demand highlights the need for a balanced approach to economic growth [17][19]. - It points out that the recent advancements in industrial technology and productivity must be matched by an increase in domestic consumption to fully realize economic potential [19][20]. Structural Challenges - The article outlines five interconnected contradictions within the demand structure, including the relationship between external and internal demand, and the disparity between government and household consumption [6][39]. - It stresses that the service consumption sector is particularly weak, which further exacerbates the overall consumption shortfall [37][39].

Core Viewpoint - The article emphasizes the need for China to enhance its consumption structure, particularly focusing on service consumption and improving the purchasing power of low-income groups [1][2]. Group 1: Economic Indicators and Trends - In May 2024, various macroeconomic indicators in China showed improvement, especially in consumer data, which exceeded market expectations [1]. - The consumption-to-GDP ratio in China is approximately 20 percentage points lower than the international average, highlighting a long-term issue in the consumption sector [1][2]. - As the growth rates of real estate and infrastructure decline, the shortcomings in consumption are becoming more pronounced [1]. Group 2: Policy Initiatives - The 2024 Government Work Report prioritizes boosting consumption and improving investment efficiency, aiming to make domestic demand a key driver of economic growth [2]. - The "Special Action Plan to Boost Consumption" outlines systematic measures to increase residents' income, enhance consumption capacity, improve service quality, and optimize the consumption environment [2]. Group 3: Consumption Data - In May 2024, China's total retail sales of consumer goods increased by 6.4% year-on-year, with a notable acceleration of 1.3 percentage points compared to the previous month [3]. - For the first five months of 2024, service retail sales grew by 5.2%, slightly outpacing the growth rate of goods retail sales [3].

Group 1 - The core focus of China's consumption development is on service consumption, particularly development-oriented consumption aimed at improving the spending capacity of low-income groups [3] - There is a significant gap of approximately 20 percentage points between China's consumption as a share of GDP and the international average, which has been obscured by high growth in real estate and infrastructure sectors [3] - The government emphasizes the need to enhance domestic demand, particularly consumption, as a key driver for economic growth, as outlined in the recent government work report [4] Group 2 - In May, China's total retail sales of consumer goods increased by 6.4% year-on-year, with a notable acceleration of 1.3 percentage points compared to the previous month, driven by policies like "trade-in" and promotional events [5] - Service retail sales grew by 5.2% in the first five months of the year, slightly outpacing the growth of goods retail sales, indicating a shift towards service-oriented consumption [5]