How can rural consumption expansion and upgrading gain momentum?

Rural consumption in China has grown rapidly in recent years, and the consumption structure has also undergone major changes, becoming an important force supporting consumption growth and raising consumption's contribution to economic growth. During the "13th Five-Year Plan" period, it is necessary to accurately grasp the direction of rural consumption upgrading, tap and release new consumption potential, and use the expansion and upgrading of consumer demand to promote "cutting overcapacity" and "destocking," adding momentum to economic growth.

　　The current state and potential of rural consumption

　　In recent years, rural consumption has shown a trend of rapid growth.On the one hand, the growth rate of rural consumption has been higher than that of urban areas for several consecutive years. With the rapid growth of farmers' incomes, rural residents' purchasing power and willingness to consume have clearly strengthened. From 2010 to 2015, rural consumption grew substantially on average annually. In 2015, rural consumer goods retail sales reached 4.2 trillion yuan, accounting for 13.9% of total retail sales of consumer goods. On the other hand, the rural structure has upgraded rapidly. Rural consumption is moving from subsistence-oriented consumption to development-oriented consumption, and the share of service consumption such as housing, transportation and entertainment has continued to rise. At the same time, rural consumption highlights have been numerous. Information, online shopping, tourism and leisure are becoming new hot spots in rural consumption.

　　Compared with urban areas, the consumption level of rural residents remains relatively low.The gap is potential. As the per capita disposable income of rural residents breaks through the 10,000 yuan mark, rural consumption expansion and upgrading will accelerate. Based on the growth trend of rural consumption during the "12th Five-Year Plan" period and by reference to the patterns of change in urban consumption structure, six areas - home appliances, automobiles, housing, information, health care, elderly care and child care, and tourism, culture, dining and entertainment - will be the greatest potential and upgrading directions for rural consumption expansion in the next 5 years. First, the expansion and upgrading of home appliance consumption. "Expansion" mainly comes from the rural poor, low-income families and the agricultural transfer population, whose current home appliance ownership rate is relatively low. With the implementation of policies such as the state's targeted poverty alleviation, strengthening agriculture and enriching farmers, and the new urbanization strategy, their demand for home appliance consumption will be effectively released. "Upgrading" comes from farmer households in the developed eastern regions or those in the central and western regions that have become better off first. They acquired home appliances earlier and have now entered the stage of home appliance replacement and upgrading. Preliminary estimates show that home appliance demand from these two aspects will grow substantially by 2020 compared with 2014. Second, automobile consumption has entered a rapid upward channel. Third, housing consumption remains robust. During the "13th Five-Year Plan" period, the growth space for rural housing consumption will mainly come from three aspects: demand for improvement, relocation and resettlement of the poor, and demand from the agricultural transfer population to settle and buy homes in cities and towns. Fourth, information consumption is accelerating. With the development of information technology and the Internet, various mobile smart terminals are accelerating their entry into the rural market and bringing rapid growth in information consumption such as smartphones, Internet access traffic and e-commerce. Fifth, the scale of health care, elderly care and child care consumption is constantly expanding. As urbanization accelerates, demand for nutrition, education, health, convalescence and nursing care for the rural elderly and children will become increasingly strong. Sixth, tourism, culture, dining and entertainment consumption continues to heat up.

　　Taking comprehensive measures to break through bottlenecks

To transform rural areas' enormous demand potential into actual consumption, comprehensive measures must be taken in aspects such as raising farmers' purchasing power, improving rural consumption facilities and conditions, and optimizing the rural consumption environment.

　　Increase farmers' incomes through multiple channels and raise rural consumption capacity.Farmers' income is an important prerequisite for expanding rural consumption. Efforts should be made to promote sustained and relatively rapid growth of farmers' incomes. First, deepen reform of the rural land system and increase farmers' property income. Second, vigorously develop rural "mass entrepreneurship and innovation" and enhance farmers' ability to increase income through starting businesses and employment. Support the construction of rural "mass entrepreneurship and innovation" demonstration parks and incubation platforms, and improve the public service system supporting "mass entrepreneurship and innovation." Support the promotion of a mentor system for farmer entrepreneurs to provide farmers with accessible and efficient entrepreneurship and employment guidance. For small and micro enterprises founded by migrant workers returning to their hometowns, reduce corporate income tax, exempt value-added tax, business tax and various administrative fees. Third, tap the income-increasing potential within agriculture and increase farmers' household operating income. In response to the upgrading of urban and rural residents' consumption structure and diversified, personalized consumer demand, support farmers in applying advanced agricultural technology and the "Internet + modern agriculture" development model, transform and upgrade the entire agricultural industry chain, develop high-quality and efficient agriculture, and improve the quality of agricultural product supply and the overall efficiency of agriculture. Fourth, increase fiscal support and raise farmers' fiscal transfer income.

　　Strengthen the construction of rural public facilities and improve the hard environment for rural consumption.Inadequate rural public infrastructure is an important factor constraining the expansion of consumption. Strengthening the construction of rural public facilities can create a better external environment for rural consumption. First, improve the infrastructure network for rural water, electricity, roads and communications. Implement projects such as rural drinking water safety, rural road upgrading, broadband access to villages and households, and a new round of rural power grid upgrading, improve pipeline networks for rural water, electricity, roads and communications, and raise the standard of rural road grades, power supply stability, water supply convenience and household Internet penetration. Strengthen the construction of rural logistics facilities and improve the rural logistics distribution network. Second, accelerate the construction of rural public service facilities. Continue implementing the renovation project for rural primary and secondary schools and strengthen infrastructure for rural medical and health care, culture and sports. Promote the application of the PPP model, attract social capital and build rural elderly care service facilities.

　　Improve relevant systems and policies and optimize the soft environment for rural consumption.Soft environments such as systems, policies and credit are important supports for rural consumption. Optimizing the soft environment for rural consumption can create favorable conditions for releasing rural areas' enormous consumption potential. First, optimize the institutional environment. Relax relevant restrictions on social capital entering rural infrastructure and public utilities, reduce the logistics, tax and fee costs of rural chain operations, deepen reform of supply and marketing cooperatives, and build comprehensive service platforms for urban and rural communities. Second, optimize the policy environment. In accordance with the requirement of equalizing basic public services between urban and rural areas, increase public fiscal support for rural areas, further improve the new rural cooperative medical system, establish a unified urban-rural residents' pension insurance system, and gradually raise the levels of rural medical insurance reimbursement, old-age security and minimum living allowances. Implement targeted poverty alleviation and increase support for poor populations. Third, optimize the credit environment. Strengthen rural market governance, improve the market supervision system, intensify efforts to crack down on counterfeit, shoddy and "copycat" infringing and fake products in the rural consumer market, ensure that qualified and high-quality products enter the rural market, and safeguard the order of the rural consumer market and the lawful rights and interests of rural consumers. In addition, pilot projects for rural green consumer credit can also be carried out to guide farmers in purchasing energy-saving and environmentally friendly automobiles and the like.