Business / Economy

Salary hikes will kick-start consumption

By Yao Jing (China Daily) Updated: 2014-03-11 08:57

More than two-thirds of luxury spending by Chinese mainlanders was carried out overseas in 2013, up from 2012, according to the China Luxury Market Study from consultancy Bain & Co.

Of course, with the rise of e-commerce, the price of goods is more transparent, and the cost of logistics is lower.

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"Still, the government can prompt a new round of consumption tax reform and lower high tariffs on imported luxury goods," said Yang.

Zhu Zhixin, vice-chairman of the National Development and Reform Commission, agreed, saying there is hope for salary reforms.

"We are now suggesting that residents' income should be in accordance with the increase of GDP," said Zhu.

In fact, salaries in China continue to rise. The trend has made the nation's workforce more expensive than in neighboring countries, according to Zhu.

"But for years, wages in government offices and public institutions were kept almost constant," said Zhu.

The government's work report also mentions that the government will support nongovernmental investors in various types of services, with a focus on elderly care, health, tourism and culture, as well as implementing a new system of paid vacations.

The number of domestic tourists amounted to 3.25 billion and total income in the sector reached 2.9 trillion yuan in 2013.

"Although we have rules on paid vacations, we are not strictly implementing these rules," said Zhang Xuewu, president of China National Travel Services Group.