Nation steps up measures to stimulate consumption

China has been implementing targeted pro-consumption measures to spur immediate spending while advancing structural reforms to unlock sustainable consumption growth, as the country moves toward a more balanced growth model anchored by its vast domestic market, economists said.

They said that a robust and expanding consumer base not only powers China's high-quality development, but also provides a stabilizing force for the global economy amid fluctuating external demand and geopolitical complexities.

At the annual Central Economic Work Conference held last week, Chinese policymakers placed "boosting domestic demand" first among eight key priorities on the economic agenda for next year.

President Xi Jinping pointed out in an article published on Monday in Qiushi Journal, the flagship magazine of the Communist Party of China Central Committee, that expanding domestic demand is crucial not only for economic stability but also for economic security. It is not a temporary measure, but a strategic move, he said.

Xi, who is also general secretary of the CPC Central Committee, called for accelerating efforts to address weaknesses in domestic demand, especially consumption, to make domestic demand the main driving force and stabilizing anchor for economic growth.

Robert Koopman, former chief economist of the World Trade Organization, said that over the next five to 10 years, "an important evolution in China's role is going to be to shift toward being a big center of demand".

Analysts said that targeted measures to stimulate consumption remain necessary in the near term, as the latest data points to slowing growth of retail sales. In November, total retail sales of consumer goods, a gauge of consumption, registered a year-on-year increase of 1.3 percent, down 1.6 percentage points compared with October, according to the National Bureau of Statistics.

On Sunday, the Ministry of Commerce, along with the People's Bank of China, which is China's central bank, and the National Financial Regulatory Administration, jointly released a document pledging stronger financial support for consumer spending.

In the document, financial institutions were encouraged to refine their services for consumption on big-ticket goods, while for the services sector, the document emphasized innovative financial products targeting industries such as elderly care, catering, tourism and education.

Dong Ximiao, chief researcher at Merchants Union Consumer Finance Co, said that front-loading of such support weeks before the new year is designed to secure early economic momentum and set a positive trajectory for 2026.

In particular, the move, launched ahead of the Spring Festival shopping season in mid-February, signaled a strategic effort to harness the year's peak consumption period, Dong added.

Analysts view the latest move as part of a calibrated "one-two punch" for consumption, pairing targeted financial support with extended trade-in programs through 2026.

Han Wenxiu, executive deputy director of the Office of the Central Commission for Financial and Economic Affairs, told a news conference on Saturday that China should "adapt to the evolving consumption structure by expanding the supply of high-quality goods and services, and optimize the implementation of the trade-in policies".

According to data from the Ministry of Commerce, from January to November this year, trade-in programs pushed sales of related goods beyond 2.5 trillion yuan ($355 billion), benefiting more than 360 million people.

Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said that next year's trade-ins could incorporate a wider range of products, particularly those with artificial intelligence features. Wang suggested scaling up the annual funding pool to 500 billion yuan — an increase from this year's 300 billion yuan.

In late November, China unveiled a plan to improve the alignment of the supply and demand of consumer goods, highlighting the application of AI across all sectors and processes of the consumer goods industry.

"More important, the scope of support could broaden beyond durable goods to encompass a wide range of service sectors such as childhood education," Wang added.

Structural reforms

Besides short-term measures, analysts emphasized that sustaining consumer strength will increasingly depend on deeper structural reforms, including raising household income, strengthening the social safety net and improving livelihoods.

To this end, the tone-setting meeting last week explicitly advocated "increased incomes for urban and rural residents".

Wen Bin, chief economist at China Minsheng Bank, said that "the policy focus is gradually evolving from simple stimulus to bolstering both the capacity and willingness of households to spend".

Wen pointed to potential measures such as adjusting personal income tax thresholds, maintaining steady growth in social welfare spending, and advancing policies that promote high-quality employment as key to enabling durable consumption growth.

China has also been proactively encouraging inbound consumption to enhance the resilience of its domestic market through the "Shopping in China" campaign, fueled by China's unilateral visa-free policies for various countries and a new initiative allowing eligible travelers to receive instant tax refunds.

wangkeju@chinadaily.com.cn