China to boost consumption of services, especially in eldercare and domestic help

BEIJING • China will look to growing consumption in the service sector, in particular on eldercare and domestic help, to boost economic growth, said a senior economic official yesterday.

"Consumption of services is a new growth area, but there are still many weak links," said Commerce Minister Zhong Shan at a press conference on the sidelines of an annual parliamentary meeting.

He was addressing concerns that last year's retail sales grew only 9 per cent, the slowest in 15 years.

Besides the ongoing trade war with the United States, softening domestic demand is another key factor dragging down the world's second-largest economy.

The Chinese government has lowered its growth target for this year to between 6 per cent and 6.5 per cent, and Premier Li Keqiang last Tuesday urged lawmakers to be prepared for "a tough struggle" when he delivered the government's work report.

While sectors such as culture, tourism, sports and online consumption have become hot spots for growth, Mr Zhong said more should be done to improve the shortcomings in the service sector.

One "obvious shortcoming" is the eldercare sector, he said, adding that China is rapidly ageing, with the number of elderly people rising to the tune of eight million each year.

 
 

"It's very challenging to provide eldercare services for these elderly people. For example, we face an annual shortage of two million beds in eldercare facilities," he said.

He singled out domestic help services in cities as another sector with room for improvement.

"It's especially hard to hire a good and affordable nanny in the large and medium-sized cities," the Commerce Minister said.

But there is abundant labour in the rural areas because many people, lacking professional skills or connections, have difficulty finding jobs in the city, he said.

To solve this problem, the Commerce Ministry last year rolled out a programme which matched 109 cities with more than 10,000 villages to train domestic helpers.

"In the past year, we have helped more than 100,000 rural people enter the city for jobs and (this) has helped increase the income of farmers and reduced the burden on urban families," Mr Zhong said at a nearly two-hour-long press conference that covered issues on the economy, trade, foreign investments and Chinese investments overseas.

Other efforts to boost consumption include improving pedestrian shopping streets and the layout of convenience stores in urban areas.

More will also be done to expand consumption in the rural areas, including by improving links between rural and urban markets so that farmers can sell their produce to the city, earn more and thus increase their spending power.

Through the same network, they can also gain better access to high-quality industrial goods.

"We will work to open up the 'last mile' (delivery) of agricultural products into the city and industrial goods to the countryside," Mr Zhong added. 

A version of this article appeared in the print edition of The Sunday Times on March 10, 2019, with the headline 'China to boost consumption of services, especially in eldercare and domestic help'. Print Edition | Subscribe