China eyes information consumption to boost domestic demand

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Authorities are aiming to support the consumption of information products and services and make the sector a new engine for boosting domestic demand and driving economic growth.

By the end of 2015, the consumption of information products and services is expected to grow at an annual pace of at least 20 percent to reach 3.2 trillion yuan (518 billion U.S. dollars), according to a guideline released by the State Council, China's cabinet, on Wednesday.

"As China's personal consumption is upgrading and the country is undergoing the processes of industrialization, informatization, urbanization and agricultural modernization, information consumption has a sound foundation and tremendous potential," the guideline says.

"Boosting information consumption can invigorate domestic demand and act as a new growth point for the economy, as well as upgrade the service industry, promote economic restructuring and improve people's lives," it says.

The guideline highlights innovation and the power of market forces as ways to promote rapid and healthy information consumption.

The value of industries that are supported by information consumption is expected to increase by 1.2 trillion yuan by the end of 2015, according to the guideline.

Internet-based consumption should grow by at least 30 percent annually to 2.4 trillion yuan, according to the guideline.

According to the data published by the Ministry of Industry and Information Technology (MIIT), China's e-commerce sector raked in 4.98 trillion yuan in revenue in the first half of this year, up 45.3 percent year on year.

Consumption of information products and services jumped 20.7 percent year on year to 2.07 trillion yuan, while the output of smartphones surged 120 percent to 214 million units.

With China's economy posting a prolonged slowdown in the past two years, the government has resolved to boost domestic demand to rebalance its outdated growth model that is overly reliant on investment and exports.

But the rebalancing drive remains an arduous task. In the first half, consumption constituted 45.2 percent of GDP growth, compared with 53.9 percent from investment, according to the National Bureau of Statistics.

The guideline also outlines the major tasks for promoting information consumption. To upgrade telecommunications infrastructure, the government will release 4G mobile communications licenses later this year.

By the end of this year, the government will also push the integration of telecommunications, Internet and broadcasting networks into one complete system covering the entire nation.

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