This view is echoed by Hou Yongzhi, Director of the Development Strategy and Regional Economy Department at the State Council's Development Research Center.

Hou believes that China needs to make a gradual adjustment from an export- and investment-driven growth model to rely more on domestic consumption, while still maintaining sustainable economic growth.

In the long term, boosting consumption will play a major role in sustaining stable economic growth, outpacing investment and exports. Consumption in China, according to 2010 World Bank data, accounted for only about 35 percent of the country's GDP, far below the United States' 71 percent, Germany's 58 percent and Japan's 60 percent, and still lower than the world average of 61 percent. China's consumption potential is enormous, and has yet to be fully realized, said Liu Yuanchun, Deputy Dean of the School of Economics at Renmin University of China.  

Consumption differences

The advent of increased consumer spending in China has made many companies realize that selling to Chinese consumers, who show important regional differences in their buying habits, is an increasingly complex business. Max Magni, a principal consultant at McKinsey & Co., has underlined that it will be more important to cater to those differences. 

According to figures from Alibaba, the company's sales rose 98 percent in central and west China in the first six months of 2011, exceeding its growth in eastern areas. The online purchasing platform shows China's great consumption capacity, especially in third- and fourth-tier cities and less developed regions, and offers a channel to balance supply and demand.

"Brands like Uniqlo and Zara that offer affordable prices are very popular among young customers in the third- and fourth-tier cities, but it is currently difficult for these consumers to purchase these goods through traditional retailers. Online shopping is able to help exploit this group's consumption potential," said Wang Yilei, Vice President of Tmall.com.

"Online shopping is not only a rival of traditional retail, but also a counterpart. It makes the whole market bigger," said Guo Tianyong, Director of China's Banking Research Center at the Central University of Finance and Economics. "The rise of e-commerce will also lead to a new round of reshuffling in traditional retail."

Rapid urbanization in China will continue to boost consumption. The generation born in the 1980s has become a major force driving consumption in housing, telecommunications, weddings and baby care. The group is more willing to accept new products and follow fashions and trends, and is more interested in spending money on social gatherings, fitness, travel, interactive games and other online products. This generation of consumers has a totally different attitude than their parents, and has a growing influence on the structures of social consumption.