Two Sessions Interview | CPPCC National Committee Member Yang Chengzhang: Capital Market Services for New Consumption Require Efforts in Three Areas

“14th Five-Year Plan” draft proposes “Leading new supply with new demand, creating new demand through new supply, and promoting healthy interaction between consumption, investment, supply, and demand.”

Member of the National Committee of the Chinese People’s Political Consultative Conference and Chief Economist of Shenwan Hongyuan Research, Yang Chengzhang, told the “China Banking and Insurance News” reporter that the new consumer industry is an important strategic foundation for expanding domestic demand and a key factor in activating the potential of domestic consumption. In recent years, China’s consumer market has shown a trend of shifting from goods consumption to service consumption, value consumption, cultural consumption, and green consumption. New formats such as live-streaming sales, the “second dimension” economy, immersive experiences, and entertainment and sports events are booming, while cultural, sports, leisure, tourism consulting, rental, and transportation services maintain double-digit growth.

“New characteristics and trends of consumer new formats also pose new requirements for the service capabilities of capital markets,” Yang Chengzhang suggested. To better facilitate the domestic cycle and form a virtuous ecosystem where savings convert into investments and income into consumption, the capital market should focus on three areas to accelerate its support for new consumption and new formats.

First, the capital market should accelerate the transformation of development concepts and increase its emphasis on service innovation in consumption. In the medium to long term, technological and digital advancements are always means of industry development, with the ultimate goal of improving residents’ consumption levels. Whether an industry can grow, strengthen, and achieve sustained growth ultimately depends on consumers’ actual purchasing power and the effective release of market demand. Without demand support, even the best products and services will struggle to translate into real economic growth. Greater support should be given to new consumption formats, providing more capital market services to help traditional retail enterprises transform and support the development of new consumption formats.

Second, the capital market should innovate valuation methods for new consumption formats based on diverse consumption values and new supply-demand relationships. First, it is essential to understand the multiple value forms of new consumption. Truly viable new consumption formats largely realize the unity of personal emotional value, social customs value, and underlying cultural value. Valuation of new consumption formats is not only an investment issue but also a sociology, cultural studies, and social psychology issue. Financial institutions should be encouraged to build professional teams knowledgeable in finance, society, and culture, and to conduct reasonable valuation and pricing based on the risk characteristics, lifecycle, and growth curves of new consumption enterprises. Second, the sustainability of consumption behavior should be a key consideration, serving as an important indicator of the long-term monetization potential of new consumption formats. Lastly, the value of innovative consumption models should be emphasized. In recent years, consumers are increasingly willing to pay premiums for high-quality, personalized products or services with strong emotional and spiritual value. When identifying and valuing new consumption enterprises, emphasis should be placed on scenarios, generational relevance, symbolism, artistry, trendiness, and brand strength. Efforts should be made to guide new consumption enterprises to combine emotional value consumption with creative models, stimulating the formation of more new consumption formats.

Third, diversify financial tools to better match the financing needs of new consumption formats. Accelerate innovation in consumption infrastructure REITs, including eligible shopping centers, farmers’ markets, department stores, and supporting intercity warehousing and cold chain logistics as underlying assets for REITs, helping enterprises raise funds for new store openings or technological R&D. Support enterprises in using REITs to raise funds, transforming traditional commercial spaces into immersive experience centers, digital live-streaming bases, or community front warehouses, upgrading consumption formats and scenarios. Encourage and support enterprises engaged in green consumption and digital cultural consumption to issue green bonds or science and technology innovation bonds.

“China Banking and Insurance News” Reporter: Feng Nana

“China Banking and Insurance News” Intern Editor: Li Zheng

“China Banking and Insurance News” Editor: Li Mengxi