Will Current Government Measures Boost Consumption in 2019?

China’s consumption growth is slowing but still comparatively high by international standards. This said, it is of some concern that the slowdown is setting in following the hyper growth and wealth accumulation of the last 30 years. Chinese aggregate household consumption was only 39 percent of GDP in 2017. Recently announced policy measures aiming at promoting consumption growth emphasize rural growth. It seems a reasonable strategy, as the per-capita expenditure in rural areas remains low, and rural per-capita consumption growth has been outpacing urban growth in recent years. However, a closer look at 2018 data suggests that achieving this goal will not be easy.