China Unveils Action Plan to Boost Domestic Consumption

China’s State Council and the Communist Party of China (CPC) Central Committee have introduced a comprehensive “Action Plan to Revitalize Consumption” aimed at stimulating domestic demand. The plan includes a series of measures to increase household incomes, enhance consumption capacity, upgrade services, and improve the overall spending environment.

Key Initiatives to Drive Economic Growth

1. Raising Incomes to Strengthen Spending Power

One of the plan’s primary focuses is increasing urban and rural incomes to encourage higher consumer spending. Key steps include:

Raising minimum wages across regions.

Expanding work-relief programs to provide job opportunities.

Cracking down on delayed wage payments for small and medium enterprises (SMEs).

To provide alternative income channels, China also plans to strengthen its stock markets, improve long-term capital market access, and enhance state-owned enterprise (SOE) value management.

2. Expanding Consumption Capacity

The government aims to make everyday necessities more affordable while increasing support for families and retirees. Major initiatives include:

Childcare subsidies to reduce the financial burden on parents.

Expansion of education and healthcare services to improve accessibility.

Raising pensions in 2025 to support the elderly.

In healthcare, China will fully implement a personal pension system, expand insurance coverage for flexible workers, and broaden occupational injury protection.

3. Improving Service Quality and Consumer Experience

The plan also focuses on improving service-based consumption through better infrastructure and accessibility. Measures include:

Upgrading elderly-friendly public infrastructure.

Promoting community-based childcare and home services.

Enhancing tourism experiences with extended scenic spot hours and simplified approvals for nationwide events.

To further boost tourism, China will launch a special Ice and Snow Tourism Promotion Plan to attract visitors to winter destinations.

4. Encouraging Major Consumption Upgrades

To stimulate demand for high-value goods, the government is introducing a nationwide trade-in program for cars, home appliances, and smart devices. Additional policies include:

Supporting the second-hand goods market to increase affordability.

Accelerating urban village renovations to improve living conditions.

Allowing special bonds for government housing purchases to stabilize the real estate market.

5. Promoting High-Quality Consumption

China is focusing on branding and innovation to enhance its consumer market. Some strategies include:

Developing “China Service” brands to improve service industry standards.

Encouraging the growth of cultural and intellectual property (IP) products.

Boosting AI-driven consumption in autonomous driving and smart wearables.

Additionally, the government is supporting the low-altitude economy, which includes drone-based tourism, yacht registration streamlining, and enhanced cruise routes.

6. Creating a Consumer-Friendly Environment

The action plan also prioritizes consumer rights and fair pricing. Some key steps include:

Enforcing paid leave rights to encourage work-life balance.

Launching a three-year consumer protection campaign.

Cracking down on fake products and unfair pricing practices.

To enhance rural and urban retail distribution, China plans to build county-level logistics hubs, upgrade night-time shopping districts, and introduce immersive retail spaces.

7. Removing Barriers to Consumption

To make consumer spending easier, China is introducing policies to remove unnecessary restrictions, such as:

Banning “one-size-fits-all” policies that limit consumer choices.

Easing auto purchase restrictions for individuals who have been waiting for long-term license plate approvals.

Supporting traditional festival activities to boost local economies.

Coordinated Implementation for Economic Growth

This action plan emphasizes a cross-departmental approach, ensuring smooth coordination between the central government, local authorities, and businesses. By addressing income levels, service quality, and market accessibility, China aims to drive sustainable, consumption-led economic growth in the coming years.