China is making a shift from manufacturing based economy towards consumption based economy. The country made impressive achievements in 2016 as domestic consumption emerged to be the primary growth driver for the economy last year.

According to a recently released report, the retail sales of consumer goods is expected to grow 10.2 percent in 2017. The figure during the year is likely to be at $5.4 trillion. The report stated that this will amount to more than 70 percent contribution to the economic growth rate in China.

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The report, released by the China General Chamber of Commerce, also added that online sale is expected to record slower growth rate. However, consumer services are expected to grow steadily during the year.

Hitherto, China has relied on manufacturing and exports to grow its economy. However, these bases are unsustainable in long run. Investment is also believed to have peaked in China. The country is now replacing these growth drivers with consumption.

The authorities are expected to keep it up as investment based growth has led to several issues. These issues range from environmental concerns to industrial overcapacity, threatening the foundations of the economy. It is also looking to reduce corporate debt.

China is also looking to stabilize its currency while growing it at the same time. For this purpose, Chinese authorities are reported to have settled for a slightly slow growth rate of 6.5 percent for 2017.

Consumption is steadily increasing its contribution to the Chinese economy. In 2014, it accounted for 51 percent of the gross domestic product. This rate of contribution increased to 66.4 percent in 2015.

TagsChina General Chamber of Commerce, china, economic growth