BEIJING, June 8 (Xinhua) -- China's entertainment and media (E&M) industries, which have been growing at an enviable pace, have emerged as a significant driving force for the country's shift to a consumption- and services-powered economy.
Global accounting firm PwC on Thursday predicted the combined E&M revenue in China will expand at a compound annual growth rate (CAGR) of 8.3 percent from now until 2021, slowing slightly but still well above the world average of 4.2 percent.
Internet video, online advertising, music, cinema and video games will lead the growth, with projected CAGRs of 19.7 percent, 12.6 percent, 12.6 percent, 11.5 percent and 11.2 percent, respectively.
"We believe a growing middle-income population with deeper pockets and stronger willingness to spend will continue to press ahead with Internet advertising," PwC China E&M Partner Brian Choi said during a press briefing. "Despite moderate economic growth, the sector has bright prospects."
China is comfortably Asia's largest online advertising market, and the second-largest globally after the United States, said the report.
Besides advertising, Chinese consumers have also shown their influence in a number of other sectors: The country overtook the United States to have the most movie screens in 2016, and is expected to take second place in video games by 2021. The markets for fee-based music and other online content are also on a fast track thanks to strengthened protection of intellectual property.
Generally unaffected by a slowdown in the broader economy, the E&M sectors have sprouted into a significant segment of the tertiary industry and have played a major role in boosting consumption.
"Consumption upgrades are providing the momentum for the economy as Chinese people have started to pay more attention to quality of life, entertainment and health in the past three to five years," said Huang Jinlao, president of Suning Finance Group and veteran analyst in consumer finance.
The National Development and Reform Commission unveiled guidelines to stimulate consumption upgrades nationwide in April 2016, putting more emphasis on services including online training and information consumption.
From booming box office revenues to burgeoning online information consumption, analysts pointed out enormous potential in the area as Chinese consumers with increasing incomes have become more willing to spend.
The China consumer confidence index of New York-based marketing research firm Nielsen rose to a two-year high of 110 in the first quarter of this year.
In a lengthy report released in March, Morgan Stanley predicted China would be able to avoid the middle income trap, with its per capita income reaching 12,900 U.S. dollars to become a high-income country in the next decade, up from the current 8,100 U.S. dollars.
"China will have a 9.7-trillion-dollar consumer market by 2030, the largest in the world," Morgan Stanley's chief Asia economist Chetan Ahya said.
Analysts believe new technology will continue to reshape and inject new vitality into the E&M industries.
Technological breakthroughs can not only improve customers' experience but create fresh development room and untapped markets, thus stimulating consumption, Choi said, citing rapid development in live streaming and virtual reality.
China's economic shift from investment to trade and from industry to services has seen solid progress.
Consumption contributed 77.2 percent of economic growth in the first quarter, up from 64.6 percent in 2016, data from the National Bureau of Statistics showed. The proportion of services in the economy also improved.
The Chinese economy secured a solid footing in the first quarter while keeping inflation tame. GDP growth was 6.9 percent in the first quarter of this year, the fastest increase in 18 months.