Targeted Measures to Enhance Consumption in China

Consumers explore festive products in Nanjing, Jiangsu province, illustrating the vibrant shopping atmosphere.

China is set to introduce a series of targeted measures aimed at boosting consumption while providing real benefits to its citizens. This initiative comes in response to a recent meeting where policymakers indicated a shift in focus to expand domestic demand amidst growing external uncertainties.

During the annual Central Economic Work Conference held in mid-December, the promotion of consumption was highlighted as a top priority in the policy agenda for the world’s second-largest economy in 2025.

According to He Yongqian, a spokeswoman for the Ministry of Commerce, the underlying conditions supporting China's favorable economic trends remain intact. She stated that the consumer market is expected to continue on a steady growth trajectory in the upcoming year.

“Boosting consumption and improving people’s livelihoods will go hand-in-hand,” He said at a recent news conference, mentioning that further policy measures are forthcoming to tap into the vast potential demand.

The Ministry of Commerce, along with various relevant departments, plans to expand the range of consumer products included in trade-in programs. This step aims to allow more families to engage in and benefit from such initiatives.

As of December 13, the trade-in policy has successfully driven over 1 trillion yuan (approximately $137 billion) in related sales, facilitating the sale of more than 5.2 million passenger vehicles and 49 million units of household appliances, based on the ministry's data.

According to Wen Bin, chief economist at China Minsheng Bank, the increasing consumer demand for sophisticated, energy-efficient, and technologically advanced products has significantly fueled the success of trade-in programs.

The initial success of trade-in initiatives has predominantly been seen in urban areas where consumers are familiar with these programs. However, Wen noted that rural markets hold substantial potential, as there is also strong demand for upgraded household appliances and durable goods yet to be fully realized.

In addition to trade-in measures, China plans to implement policies encouraging the high-quality development of service consumption. This is crucial as consumers are increasingly leaning towards services that provide emotional value and a sense of fulfillment, such as cultural activities, tourism, sports, and health and leisure services.

Research conducted by the Development Research Center of the State Council reveals a trend where per capita service consumption among Chinese residents grew by 7.6 percent year-on-year in the first three quarters of the year, significantly outpacing the 2 percent increase in overall per capita consumer spending, according to the National Bureau of Statistics (NBS).

Moreover, the share of service consumption expenditure in total household consumption has increased by 0.9 percentage point compared to last year, now making up 47 percent of total consumer spending, the NBS reported.

Looking forward, concerted efforts should focus on reducing the negative list for foreign investment access in key sectors such as telecommunications, the internet, and healthcare. This will create opportunities for international businesses to contribute towards the diversification and enhancement of service offerings, as noted by Chen Lifen, a researcher at the Development Research Center.

China, Consumption, Policy