Female customers shop for gold jewelry at a store in Suzhou, East China's Jiangsu Province on March 6, 2025. Photo: VCG
China on Sunday made public a plan on special initiatives to boost consumption. This comes as the world's second-largest economy moves to make domestic demand the main engine and anchor of economic growth.
The plan, issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council, aims to vigorously boost consumption, stimulate domestic demand across the board, and increase spending power by increasing earnings and reducing financial burdens, according to the Xinhua News Agency.
It also aims to generate effective demand through high-quality supply, improve the consumption environment to strengthen consumer willingness to spend, and address prominent constraints on consumption.
The move came after China's policymakers have delivered clear and decisive signals to encourage consumer spending, addressing doubts about the country's transition to a consumption-driven economy.
China will "place a stronger economic policy focus on improving living standards and boosting consumer spending," according to this year's Government Work Report at the just closed two sessions.
Promoting consumption is not a new concept in China's policy toolbox. Consumer spending plays an increasingly important role in China's economy. Data from the National Bureau of Statistics showed that in 2024, final consumption contributed 44.5 percent to China's economic growth, surpassing investment and exports, and driving GDP growth by 2.2 percentage points.
The latest approach to boosting consumption is very comprehensive, underscoring the government's determination with pragmatic efforts to strengthen the economy, where consumption plays a key role, Hu Qimu, deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Sunday.
The ramped-up measures to boost consumption are particularly crucial this year, as China's economy faces challenges amid the rise of trade protectionism and global headwinds, as well as the shift from traditional growth drivers like real estate to new, more sustainable sources of growth, Hu added.
"Stimulating consumption to expand domestic demand can effectively counter external uncertainties, stabilize short-term growth, and contribute to long-term structural transformation," Hu said.
Increasing residents' income Among the 30-points plan, it has put increasing income of urban and rural residents as the first part, which highlighted promoting reasonable growth of wage income, with the measures to implement employment support plans for key areas, key industries, urban and rural grassroots, and small and medium-sized enterprises.
In light of changes in the situation, it will increase employment support, especially for key groups.
It also highlighted expanding channels for property income, saying that it will implement multiple measures to stabilize the stock market, and strengthen strategic reserves and enhance market stabilization mechanisms. Introducing a wider range of bond-related investment products tailored for individual investors is also highlighted there.
Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Sunday that wage income and property income need to progress together. "The preservation and appreciation of assets are the foundation of consumer confidence, directly influencing residents' willingness and ability to spend," he said.
Wang also said consumption and income create a positive cycle. "Increased consumption boosts economic vitality, which in turn generates more jobs and income, further stimulating consumption. In this process, government policies play a crucial role in 'activating the overall situation,'" Wang added.
The measures also include increasing support for trade-in scheme, which was launched a year ago and has played a vital role in revitalizing the consumer market.
It said it should make good use of ultra-long special treasury bonds, support local governments to expand the scope of the trade-in program policy for consumer goods, promote the green and intelligent upgrade of large durable consumer goods such as automobiles, home appliances, and home decoration.
To support this pivotal transition, the Government Work Report unveiled stronger supportive measures, including issuing ultra-long special treasury bonds of 300 billion yuan ($41.45 billion) to support the consumer goods trade-in program, doubling the scale from last year.
In 2024, the program brought in sales of more than 1.3 trillion yuan, including more than 6.8 million cars, 56 million home appliances and 1.38 million electric bicycles. This year, more items have been added to the list of subsidized products.
"The trade-in scheme goes beyond being just an economic policy," Minister of Commerce Wang Wentao stated at a press conference during the third session of the 14th National People's Congress on March 6, emphasizing that it has spurred new growth drivers and enhanced the quality of life for millions of households.
Chinese policymakers also linked consumption to lifestyle improvements rather than just spending volume. The measures also include expanding cultural, sports and tourism consumption, promoting ice and snow consumption and boosting inbound consumption.
The market size of the ice and snow economy in Northeast China's Heilongjiang Province reached 266.17 billion yuan in 2024, of which the output of ice and snow tourism was 182.33 billion yuan, said the provincial bureau of statistics.
During the 2024-2025 winter season, Heilongjiang received 135 million domestic and overseas tourists, up 18.5 percent compared with last year's winter season. Tourist spending also increased by 30.7 percent, Xinhua News Agency reported on Thursday.
