China's policies to expand opening up, support innovation and improve the business environment have fueled the rapid growth of new business models that are contributing to the development of the economy.
The first-store economy is a sterling example of this. Shanghai, as the country's largest business hub, leads in attracting international and domestic brands to open their first store in the city. According to Shanghai Municipal Commission of Commerce data, 756 first stores opened in the first three quarters of 2019, a 74.6-percent jump year on year. By the end of November 2019, the figure had exceeded 900.
After the first and second editions of the China International Import Expo in 2018 and 2019 respectively, the facilitated, transparent and enormous Chinese market is attracting more international brands to open their first regional stores not just in first-tier cities like Beijing and Shanghai but also in second- and third-tier cities where consumers' tastes have become upgraded.
The growing number of young-generation consumers and the economic transformation from production to quality consumption have also boosted the growth of new economic forms.
Currently, the income distribution structure in China is olive-shaped with an expanded middle-income group forming the bulk of society. A large population of young people with stable middle incomes pursue brands and unique lifestyle. This has stimulated the development of new economic forms catering to the demand of these young consumers.
The economy today is mainly stimulated by consumption instead of the older model driven by exports and investment. This is also driving the growth of new economic forms. Due to this reason most of the new economic forms in China are in the service sector.
Against the backdrop of innovation-driven development, new economic forms will win better acceptance while new technologies, new models, new industries and new market demand will generate space for the development of new economic forms. These forms are bringing significant changes to the industrial system and becoming a new impetus for China's economic growth.
However, a word of caution should be sounded despite the rapid growth. The new economic forms are still in a primary stage of development. So the authorities need to streamline administration and improve services so that a sound environment is created for unleashing their vitality as far as possible.