Chinese officials elaborate on coordinated policies to spur consumption following an action plan

Officials from six Chinese government departments including National Development and Reform Commission (NDRC), Ministry of Finance, Ministry of Commerce and the People's Bank of China (PBC) vowed on Monday at a press conference to implement coordinated measures to spur consumption, with economic and social policies, including fiscal, financial, industrial and investment policies all aimed at promoting consumption.

The press conference came after the country on Sunday rolled out a 30-points plan to boost consumption.

The plan, issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council, aims to vigorously boost consumption, stimulate domestic demand across the board, and increase spending power by increasing earnings and reducing financial burdens, according to the Xinhua News Agency on Sunday.

The plan represents the most robust consumer promotion initiative introduced this year and serves as a rapid implementation of the policy priorities outlined in the Government Work Report delivered at the just-concluded two sessions, experts said.

On Monday, the National Bureau of Statistics (NBS) released its statistics of retail sales of consumer goods in January-February period, which saw a growth of 4 percent year-on-year, representing a growth rate of 0.5 percentage points higher than that in 2024. 

Experts said domestic consumption will be boosted by these timely and comprehensive supporting policies, and will continue to support stable economic development, especially amid external economic and geopolitical uncertainties.

New highlights

Li Chunlin, deputy director of the NDRC, said during the press conference on Monday that the previous consumption policies mostly focused on the supply side, while the new action plan intensifies policy efforts on the demand side, aiming to increase residents' income and reduce financial burdens with specific measures including promoting reasonable wage growth by strengthening employment support and improving the minimum wage adjustment mechanisms.

The plan has, for the first time in consumption-promotion documents, emphasized stabilizing the stock market and real estate market with corresponding measures, in order to enhance people's spending capacity, stabilize consumption expectations, and strengthen confidence in consumption, Li noted.

Moreover, the plan integrated consumption stimulation with livelihood improvement. We formulated tangible and substantial policy measures including arranging 300 billion yuan of ultra-long-term special treasury funds this year to support the consumer goods trade-in programs, an increase of one-fold from last year, Li said. 

Coordinated efforts across various policies are essential to stimulate consumption, Li said. As outlined in the plan, fiscal, financial, industrial, and investment policies must align with the goal of promoting consumption. This includes substantial capital injections such as project investments, fiscal funds, union budgets, and consumption assistance programs, as well as policy support including macro-policy alignment assessments, financial credit mechanisms, statistical system reforms, and the protection of rest and paid leave rights, the official noted.

During the conference, other five departments also detailed the deployment of the related policies. State Administration for Market Regulation said it will cooperate with other departments to create a safe consumption environment, and the PBC, the central bank, will roll out specialized documents on financial support for expanding consumption, with measures including moderately loose monetary policy to create a favorable financial environment for expanding consumption.

The Ministry of Finance will strengthen health care, education, pension and employment protection. As of the Ministry of Human Resources and Social Security, it will focus on measures to implement employment support plans for key areas, key industries, urban and rural grassroots, and small and medium-sized enterprises. The Ministry of Commerce will promote the expansion of services consumption and cultivate the new growth point of auto consumption.

"The plan represents the most robust consumer promotion initiative introduced this year and serves as a rapid move to respond to the policy priority of expanding domestic consumption outlined in the Government Work Report," Tian Yun, an economist based in Beijing, told the Global Times on Monday.

Cao Heping, an economist at Peking University, said the plan was "comprehensive." "The plan emphasizes integrated consumption, which means scattered and isolated policies should be integrated to form an overall consumption enhancement. Moreover, it also focuses on benefiting people's livelihoods, which requires many-sided efforts from employment, incomes and social security," Cao noted.

Cao said the policy has elevated the demand-side to the same level of priority as the supply-side focus in the past, marking a shift in policy orientation. Tian agreed, noting that "In the action plan, the top priority is to increase residents' income. I believe this approach captures the core of stimulating consumption, as income is the fundamental basis for household spending."

Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Monday that the plan, for the first time in consumption-promotion documents, emphasized stabilizing the stock market and real estate market, which represents a positive signal to boost the capital market. "A stronger capital market can produce a direct wealth effect, which will create a positive cycle to increase the property income of residents, thus boosting consumption," Yang noted. 

Pillar to support economy

The plan also raised wide attention from foreign media outlets. For instance, Reuters focused on policies including increasing residents' income and establishing a childcare subsidy scheme; Bloomberg reported that "The latest effort, which covers eight areas, outlines plans to improve childcare and includes a pledge to enforce China's paid leave system." The Financial Times said, "The plan will focus on raising incomes, stabilizing the real estate and stock markets, and improving medical and pension services."

Boosting consumption is also a vital measure to address external uncertainties mainly brought by the rising unilateral moves, Tian said, noting that the consumption will continue to serve as a pillar to support the stable economic development.

According to the NBS, total retail sales of consumer goods reached over 8.37 trillion yuan from January to February. Excluding automobiles, the figure was 7.68 trillion yuan, registering a year-on-year growth of 4.8 percent. 

As Chinese residents' consumption capacity grows and consumption upgrades speed up, new types of consumption like green and digital consumption, and service consumption such as elderly and childcare services, are expanding and will become key drivers of consumption growth, according to the NBS.

"The performance of consumption data in the first two months sends out a positive signal indicating that the previous policies have taken effect," Cao said, noting that with the continued implementation of the policies mentioned in the plan, the proportion of consumption in GDP is expected to reach 48 percent this year.