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Strengthened resilience key for economy

Boosting domestic demand top priority as nation gears up for 15th Five-Year Plan

By Zhou Lanxu, Wang Keju and Liu Zhihua | chinadaily.com.cn | Updated: 2025-12-13 06:58
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China's sharpened emphasis on building a strong domestic market underscores the country's long-term resolve to bolster economic resilience and development security amid external challenges as it gears up for the 15th Five-Year Plan (2026-30), economists and policy advisers said.

The Central Economic Work Conference, they said, has signaled potential new measures to strengthen domestic demand in the year ahead — including heightening emphasis on stabilizing the economic trajectory, markedly raising investment in people-centered sectors such as education and healthcare, as well as making greater use of capital market reforms and State-owned assets to boost household incomes.

The tone-setting conference concluded on Thursday, at which Xi Jinping, general secretary of the Communist Party of China Central Committee, delivered an important speech. The conference stressed that domestic demand will remain as a focus in building a robust domestic market.

This year's focus on domestic demand builds on the consistent guidance laid out by Xi. At last year's Central Economic Work Conference, Xi pointed out that expanding domestic demand is crucial for not only economic stability but also economic security — it's not a temporary measure, but a strategic move.

Xi called for accelerating efforts to address weaknesses in domestic demand, especially consumption, to make domestic demand the main driving force and stabilizing anchor for economic growth.

Experts said the consistent emphasis on domestic demand reflects the top leadership's accelerated push to shift toward a consumption-led growth model that is reliable and durable as China's economic size expands, while external trade conditions become increasingly challenging.

Justin Yifu Lin, dean of the Institute of New Structural Economics at Peking University, told China Daily that he expects the central government to tackle local protectionism and enhance factor mobility to accelerate the establishment of a unified national market in 2026, while furthering targeted support for culture, tourism, education and sports-related spending — all to bolster consumption and expand demand.

"These efforts will help address short-term challenges and lay the groundwork for long-term development," Lin said.

He added that the current weakness in consumer confidence remains largely a short-term difficulty shaped by the global economic slowdown, excess capacity in certain sectors and limited support from the stock market for household wealth.

The country's leadership, at the Central Economic Work Conference, has stressed responding to external challenges by strengthening internal capabilities, recognizing that the impact of changes in the external environment has deepened.

Finance Minister Lan Fo'an said the continuation of a "more proactive" fiscal stance in 2026, set by the conference, represents a major decision to address external shocks as well as internal risks and challenges.

Pointing to the challenges of lukewarm consumer demand and investment momentum, the total retail sales of consumer goods grew 2.9 percent year-on-year in October, marking the fifth consecutive month of deceleration, while the country's fixed-asset investment dropped by 1.7 percent in the first 10 months, data from the National Bureau of Statistics showed.

Vowing to maintain policy strength and consistency, Lan told Xinhua News Agency that efforts must be made by combining investments in physical infrastructure and human capital.

Luo Zhiheng, chief economist at Yuekai Securities, said China's fiscal resources are likely to shift toward a more balanced structure — "from prioritizing investment to giving equal weight to investment and consumption, from prioritizing supply to giving equal weight to supply and demand, and from prioritizing enterprises to giving equal weight to enterprises and households".

Reforms in income distribution and the social security system may also be accelerated, Luo said, as the conference called for formulating and implementing urban-rural income growth plans.

Zhang Xiangchen, deputy director-general of the World Trade Organization, said China, as the world's second-largest economy, is not only opening its door even wider but also leveraging its own vast domestic market as a new engine for shared global prosperity.

"The 'Shopping in China' initiative — aimed at boosting inbound consumption and enhancing China's appeal as a world-class consumption and lifestyle hub — reflects the growing global appeal of Chinese products and attractions, and the maturity of its consumer market," said Jeroen Sterel, director of the Asia-Pacific region at German heating system manufacturer Vaillant Group.

Ouyang Shijia contributed to this story.

Contact the writers at zhoulanxv@chinadaily.com.cn

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