Targeted Measures to Stimulate Consumption in China

During the recent festive season, consumers explored a variety of holiday products in Nanjing, Jiangsu province. In response to ongoing economic challenges and shifting priorities, China plans to implement several targeted measures aimed at boosting consumption and improving the quality of life for its citizens. This decision follows a recent meeting where policymakers emphasized the importance of expanding domestic demand, particularly in light of external uncertainties affecting the economy.

The Central Economic Work Conference, held in mid-December, marked a significant point with a clear directive: promoting consumption vigorously is now at the top of China’s policy agenda for 2025. He Yongqian, a spokesperson for the Ministry of Commerce, highlighted the unchanging conditions and trends that support a positive long-term economic outlook for China and expressed confidence in steady growth within the consumer market.

He stated, "Boosting consumption and enhancing people's livelihoods will go hand-in-hand," and assured that additional policy measures are being developed to tap into the extensive potential demand available.

One such measure includes expanding the reach of trade-in programs, which currently allow households to exchange old products for new ones. This initiative has reportedly generated over 1 trillion yuan (around $137 billion) in sales, reflecting strong consumer interest. Data shows that this program has led to the sale of over 5.2 million passenger vehicles and more than 49 million units of household appliances.

As consumer preferences evolve towards sophisticated and energy-efficient products, trade-in programs are benefiting from this demand shift. Wen Bin, chief economist at China Minsheng Bank, noted that urban areas have been the initial beneficiaries of the trade-in policy, but significant opportunities exist in rural markets, where demand for appliances and durable goods remains substantial yet untapped.

Moreover, to promote high-quality service consumption, additional policies will be enacted. Chen Lifen from the Development Research Center of the State Council remarked on the growing consumer preference for services that offer emotional satisfaction and fulfillment, which include cultural, tourism, sports, and leisure activities.

Statistics from the first three quarters of the year illustrate this trend: per capita service consumption increased by 7.6% year-on-year, outpacing overall consumer spending growth. Notably, the portion of household consumption spent on services has risen to 47%, reflecting a 0.9 percentage point increase from the previous year.

Looking ahead, efforts will also focus on reducing restrictions on foreign investment, particularly in sectors like telecommunications, the internet, and healthcare. This approach aims to create room for international players to enrich service offerings and help diversify the market.

Consumption, Policy, Economic