MNI China Press Digest Nov 7: Consumption, Domestic Shift, FDI

Highlights from Chinese press reports on Friday:

• To effectively boost consumption during the 15th Five-Year Plan, the government must transition from an investment-oriented model to a service-oriented one, providing greater consumer resources through a robust social security system and the expansion of affordable housing, according to Liu Yuanchun, president at the Shanghai University of Finance and Economics. Liu emphasised that state-owned enterprises should increase profit-sharing with the public and prevent excessive monopoly profits from being directly reinvested. He argued that these structural reforms would be more effective in raising consumption than relying on short-term stimulus measures or attempts to reduce income inequality immediately.
• More firms in China are shifting focus to the domestic market, given uncertainty in the export outlook, intense competition and exposure to logistics costs, Yicai report, noting this year’s November Double 11 shopping event was both a challenge and an opportunity. The firms faced difficulties from China’s complex distribution network, differences in consumers’ preferences and usage habits, and a lack of professionals familiar with the domestic market.
• China will continue to expand market access in the service sector, advance the development of key foreign-invested projects and ensure equal participation of foreign enterprises in government procurement, according to Ling Ji, vice minister at the Ministry of Commerce. Speaking at a roundtable meeting with foreign-funded enterprises in Shanghai, Ling said the government will implement tax credit policies for reinvestment, strengthen intellectual property protection and further cultivate a world-class, market-oriented, law-based business environment. The meeting was attended by representatives from more than 30 foreign companies and business associations in China, including Nissan Motors, LEGO and the China-Britain Business Council.