SCMP Editorial

Editorial | Spending on leisure is key to growth in China

If Beijing can raise the incomes and social standing of 600 million people, it will have created a formidable consumer market for its dual-circulation policy

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Shoppers walk through a festive market in Shanghai on December 19, 2020. Photo: Bloomberg

SCMP Editorial

Published: 9:30pm, 30 Dec 2020Updated: 11:12pm, 30 Dec 2020

China’s most popular leisure activities do not cost much, if anything, to participate in. Mahjong, table tennis and the shuttlecock game jianzi, soccer and basketball, tai chi, calligraphy, kite-flying and just sitting under a tree and chatting with friends or neighbours expends little more than effort and time.

A survey showing that more than four in 10 of Chinese spend US$153 or less a year in their spare moments should not be surprising. But with domestic consumption being seen by Beijing as the way forward given prevailing global conditions, the figure also points to the huge potential for economic growth that lies in consumer spending.

The study of 12,000 people by the Chinese Academy of Social Sciences and the Tencent Literature and Travel Industry Research Institute found that the average annual spending on leisure was 5,647 yuan (US$863). But 44.4 per cent of respondents spent less than 1,000 yuan, revealing the large gap between the nation’s rich and poor.

Premier Li Keqiang highlighted that in May when he said that 600 million people, or about 40 per cent of the population, earned less than 1,000 yuan a month, representing just US$5 a day. President Xi Jinping recently announced a target of eliminating poverty this year had been attained; lifting the less well-off to the ranks of the middle class and narrowing the wealth gap is the obvious next goal.

Focusing on the domestic economy, a key element of Xi’s dual-circulation strategy for growth, makes sense with the nation being buffeted by the global downturn as a result of the Covid-19 pandemic and continued trade pressure from the United States. Consumption is being mainly driven by the wealthy and the 300 million or so people considered to be middle class. If Beijing can raise the incomes and social standing of 600 million, it will have created a formidable consumer market. Boosting incomes has to be coupled with innovative policies to encourage spending.

Leisure is an obvious area to target. Increased spending on travel and entertainment goes hand in hand with higher income. The simple things in life need not disappear as a nation grows wealthier, but there also has to be incentives and opportunities for enjoyment if a nation’s full economic growth potential is to be tapped.