Compiled from a report by China Daily on March 13.
China is placing domestic demand at the core of its economic strategy, signaling a structural shift toward a more consumption-driven growth model that could reshape the country’s role in the global economy.
Policies outlined in the latest Government Work Report highlight expanding domestic demand as the top policy priority for the second consecutive year, reflecting Beijing’s long-term goal of transforming China from the “world’s factory” into one of the world’s largest consumer markets.
Consumption as a New Growth Engine
China’s consumer market has already reached significant scale. According to the National Bureau of Statistics of China, total retail sales of consumer goods exceeded 50 trillion yuan ($7.23 trillion) in 2025 for the first time. Final consumption expenditure contributed 52 percent of economic growth, underscoring the growing importance of household spending.
Policymakers view domestic demand not only as a short-term growth stabilizer but also as a long-term strategic pillar for economic security and sustainable development.
By strengthening household purchasing power and encouraging consumption upgrades, China aims to create a more resilient economy that is less dependent on external demand.
Policy Measures to Boost Household Spending
To stimulate consumer demand, authorities are rolling out a series of policy measures designed to strengthen income growth and improve social welfare.
Key initiatives include:
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A comprehensive income growth plan for urban and rural residents
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Measures to increase earnings among low-income groups
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Efforts to expand property income opportunities
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Continued improvements to the social security system
These policies are intended to raise household confidence and spending capacity, creating a stronger foundation for long-term consumption growth.
Trade-In Programs and New Consumption Scenarios
The government is also expanding programs to upgrade consumer goods and services.
According to the Government Work Report, about 250 billion yuan in ultra-long special treasury bonds will be allocated to support consumer goods trade-in programs, encouraging households to replace older products with green and intelligent alternatives.
The initiative will also provide additional support for brick-and-mortar retailers, helping them adapt to evolving consumption patterns.
Meanwhile, policymakers plan to accelerate the development of new consumption scenarios, particularly in services such as tourism, cultural entertainment and lifestyle experiences.
Shift Toward Service Consumption
Economists say China’s consumption structure is gradually shifting from durable goods — such as automobiles and home appliances — toward service-based spending.
Data from the National Bureau of Statistics of China shows that per capita service consumption expenditure grew at an average annual rate of 8.5 percent between 2020 and 2025.
This trend reflects several structural factors:
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Rising household incomes
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Demographic shifts
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Increasing demand for lifestyle and experience-driven consumption
Analysts believe the next stage of growth will depend on improving service quality, diversity and supply capacity.
Opportunities for Global Companies
China’s expanding consumer market is also creating opportunities for international companies.
Authorities have pledged to broaden market access for foreign investors in key service sectors, including value-added telecommunications, biotechnology and wholly foreign-owned hospitals.
Foreign businesses are already positioning themselves to benefit from rising consumption.
Executives from global brands say China remains a critical pillar of their global strategy. Companies such as Coach and McDonald’s are continuing to expand their presence in the country’s rapidly evolving consumer market.
McDonald’s China plans to open more than 1,000 new restaurants in 2026, aiming to capture growing demand for dining and lifestyle consumption.
Global Growth Implications
Economists note that a stronger Chinese consumer market could reinforce the country’s role as a major driver of global economic growth.
As China expands imports and opens new channels for international products and services, the country’s domestic market is expected to play a larger role in supporting global businesses.
For international investors and multinational companies, the message is clear: China’s long-term economic trajectory is increasingly tied to the strength and expansion of its consumer market.