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More than 6 million Chinese travelers spent a record 90 billion yuan ($14.29 billion) out of Chinese mainland during the Spring Festival holiday.
Apart from durable commodities such as electric rice cookers, smart toilet seats and air purifiers, the Chinese consumers also bought large amounts of daily necessities, such as electric razors, thermos bottles, cosmetics, foods and medicines.
Why did they travel such a long way to purchase commodities that are easily available at home? The answer lies in the differences in quality, price and consumer trust.
Quality and price are always important factors influencing consumption decisions. Chinese tourists can always find better products at the same price abroad. Many products made in China are even cheaper in foreign countries and are of higher quality than those in the domestic market.
But foreign dealers and retailers also offer more considerate services and better shopping experiences. And in developed countries, consumers have more effective ways to protect their legal interests than in China, where there are still many obvious loopholes in the implementation of the far-from-satisfactory consumer rights protection law.
Chinese tourists' shopping sprees abroad are an inevitable result of their comprehensive comparison of the differences between the consumption environments at home and abroad, and reflect the problems with almost every aspect of the domestic consumption environment.
Consumers always look for commodities of higher quality and better design, a feeling of being respected and protected, and rest-assured after-sales services, all of which constitute pleasant consumption experiences.
China is upgrading its industries, promoting innovation and spurring consumption. If these endeavors succeed, China can win back its consumers again.
Yet, the obscure price structure and heavy tax burden in China squeeze companies' room to reduce prices.
The reports of conflicts between sellers and consumers in China during the Spring Festival indicate some businesspeople care little about their image and reputation and care only about quick profits, which they pursue under the loose supervision of administrative departments.
Chinese people's spending in foreign countries has continuously increased in recent years, becoming an important driving force for economic growth in some countries, even when domestic consumers are still feeling the pinch of sluggish economic growth. If this momentum is unchecked, China will always find its consumption a tire leaking air as it bids to advance its own economic growth.
Destocking and solving overcapacity are two urgent tasks for the Chinese economy. The robust consuming of Chinese tourists abroad is a lively testimony to their buying potential at home. The flow back of consumers is a key to the supply-side reform of China.
So on the one hand, the government should cut taxes to relieve the tax burden on companies, which would enable them to put more money into research and development. On the other hand, it needs to reduce the increases to prices of commodities in the process of circulation, and lower the costs of logistics.
Also, to establish a well-regulated consumption environment, where trust and honesty are valued more than quick profits, there should be harsh law-based punishments for wrongdoers, including the watchdog departments and officials who fail in their duties.
The government should also continuously reduce the costs for consumers to defend their legal rights and interests, because they are the key factor connecting all parts of the economy.
The article was first published in Beijing Times on Feb 18.
