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Consumption to play bigger part in growth

Experts stress need to ensure people have confidence, willingness to spend

By FAN FEIFEI | CHINA DAILY | Updated: 2025-12-20 07:47
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Tourists interact with parading performers at the Harbin Ice-Snow World in Harbin, Northeast China's Heilongjiang province, Dec 17, 2025. [Photo/Xinhua]

China's latest efforts to boost consumption and expand domestic demand will shore up consumer confidence and stimulate economic growth as the nation prioritizes the building of a robust domestic market to navigate rising external uncertainties, experts and company executives said.

They noted that a series of pro-consumption policies will accelerate the country's shift toward a consumption-driven growth model, while calling for an intensified push to improve the social security system and optimize the income distribution mechanism to further enhance residents' willingness and ability to spend.

Their comments came as the tone-setting Central Economic Work Conference, which concluded last week, stressed the need to boost the domestic market by implementing consumption enhancement campaigns and urban-rural income growth plans, removing unreasonable restrictions hindering consumption and stimulating service consumption potential.

Su Jian, a professor of the School of Economics at Peking University, said that the key to boosting consumption lies in ensuring that "people not only have money and leisure time but also the confidence and willingness to spend".

Su emphasized the significance of expanding employment and guaranteeing stable incomes for low-income groups, saying that more supportive measures are needed to build a comprehensive and robust social security system, boost the development of culture, tourism and sports consumption, and nurture new types of consumption in the digital, green and intelligent fields.

Citing consumption's role as the primary economic driver, Xu Hongcai, deputy director of the economic policy committee of the China Association of Policy Science, stressed the necessity to raise people's salaries, ease household burdens in areas like healthcare and old-age insurance, and expand property income channels.

Xu suggested improving the social security level for low-income groups by transferring a portion of State-owned equity to social security funds to increase their disposable incomes, as well as providing direct consumption subsidies for rural residents when they purchase home appliances.

Consumer spending has become the main driving force behind China's economic growth. Final consumption expenditure contributed 53.5 percent to economic growth in the first three quarters of 2025, up 9 percentage points from the full-year figure of the previous year, said the National Bureau of Statistics.

Alfred Yin, consumer products and retail assurance leader at EY Greater China, said that China's emphasis on boosting consumption during the 15th Five-Year Plan (2026-30) period signals that consumption is no longer treated as a mere "short-term stimulus tool", but has been elevated to "a long-term strategy".

He noted that consumption is playing a fundamental role in stabilizing economic growth, expanding employment and promoting high-quality development, highlighting its pivotal role in bolstering domestic demand and strengthening domestic circulation.

Yin added China's consumer market is expected to gain more momentum next year, with improvements in household income expectations and consumer confidence, while service consumption will serve as a key driver boosting domestic demand. He said that policy measures are expected to become more proactive in 2026, adding that the consumer goods trade-in program is likely to continue. "The trade-in program is far more than a short-term stimulus, but also an important lever for promoting structural economic reforms. It lowers the threshold for consumption and effectively stimulates residents' willingness to purchase big-ticket categories, while driving consumption upgrading and technological iteration."

Yin said that the deep integration of green consumption with the circular economy will be further improved, while new consumption scenarios will be created through the use of digital technologies. AI-powered recommendations, virtual try-on, and intelligent customer service will see a broader application in the retail and service industry, to enhance personalized shopping experiences, he added.

"Domestic consumption has been and always will be a key pillar of the Chinese economy. To adapt to the pace of change in the consumer sector, people's longing for good lifestyles becomes an anchor point for future innovation in a time of rapid technological advances," said Samantha Zhu, chairperson of Accenture Greater China.

Retail sales, a significant indicator of consumption strength, rose 4.5 percent year-on-year to 36.59 trillion yuan ($5.2 trillion) in the first three quarters, according to the NBS.

Cui Jingyi, vice-president of United Kingdom-based industrial software developer Aveva and general manager of Aveva China, said that boosting consumption is a key priority for China's economic growth, and the company sees this as a tremendous opportunity. "As China continues to emphasize consumption-led development, we are actively adapting our strategies to align with evolving market dynamics and consumer expectations."

Cui said that Aveva is committed to bringing cutting-edge technologies and the latest products to the Chinese market, and accelerating the green and low-carbon transformation across industrial sectors and advancing intelligent manufacturing.

Hideki Ozawa, president and CEO of Canon China, said the company fully supports China's efforts to boost domestic consumption. "With a growing market and government support, we have seized many new opportunities. The imaging market is thriving. We're very optimistic about the future and believe that a new golden age for the camera market is coming soon."

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