Targeted Measures to Boost Consumption in China

Consumers explore festive products in Nanjing, Jiangsu province, showcasing the vibrant shopping culture in China.

In response to current external uncertainties, China is set to implement various targeted measures aimed at boosting consumption and enhancing the well-being of its citizens. This decision aligns with recent discussions among policymakers emphasizing the importance of increasing domestic demand. The annual Central Economic Work Conference held in December recognized the "vigorous promotion of consumption" as a key priority for the country's economic agenda for 2025.

According to He Yongqian, a spokeswoman from the Ministry of Commerce, the foundation supporting China's long-term economic growth remains intact, indicating that the consumer market is expected to show steady growth in the upcoming year. "Enhancing consumption while improving people’s livelihoods are mutually beneficial objectives," He commented during a news conference, revealing that more supportive policies will be developed to unlock the significant untapped demand in the market.

The Ministry of Commerce aims to expand its trade-in programs to include a broader spectrum of consumer products, enabling more households to engage with and benefit from these initiatives. The trade-in policy has already spurred over 1 trillion yuan (approximately $137 billion) in sales, facilitating the purchase of over 5.2 million passenger vehicles and around 49 million units of household appliances.

Economic experts highlight that changing consumer preferences are driving a surge in demand for advanced, energy-efficient products, supporting the growth of trade-in programs. Wen Bin, the chief economist at China Minsheng Bank, asserts that while urban areas have been the initial focus of these programs, significant potential exists within rural markets. Rural consumers are also keen on upgrading their household appliances and durable goods, an area that remains largely untapped.

In addition to trade-in initiatives, the government plans to introduce measures aimed at promoting high-quality development in service consumption. Researcher Chen Lifen from the Development Research Center of the State Council points out that consumers are increasingly seeking services that offer emotional satisfaction, such as cultural experiences, tourism, and health-related activities.

Data from the first three quarters of the year reveals that service consumption per capita among residents grew by 7.6%, significantly outpacing the 2% increase in overall consumer spending. The proportion of service expenditure in total household consumption has also risen, now making up 47% of total consumer spending, according to the National Bureau of Statistics.

Moving forward, it is essential to reduce restrictions on foreign investment in sectors like telecommunications and healthcare. Chen emphasizes that enabling international companies to contribute to the enhancement and diversification of service offerings is vital for future growth.

Consumption, Growth, Policy