Government shifts focus to domestic demand
China announced a new consumption-focused strategy aimed at strengthening demand in the world’s second largest economy. The initiative, released by the Ministry of Commerce along with the central bank and other government agencies, sets out measures to lift household spending as traditional growth engines such as investment and exports lose momentum.
Authorities said the goal over the next five years is to raise the proportion of consumption in GDP and expand the role of domestic demand in economic growth. The plan follows recent signals from Chinese leaders that policy will prioritise consumer activity as limits to investment and slowing global trade pressure the country’s economic model.
Rural upgrades and new consumer categories
The statement said Beijing will promote upgrades of consumer goods in rural areas and expand support for product categories tied to lifestyle and personal interests. These include footwear, children’s and elderly products, pets, fashion items, anime themed goods and so called trendy toys.
Officials also highlighted the need to improve research and development to encourage higher quality products and services. The plan includes support for home service robots, smart home appliances and artificial intelligence products that can help drive a new wave of domestic spending.
Five year targets for stronger demand
Policymakers pledged to coordinate growth in demand with deeper supply side reforms. By 2030 the contribution of consumption to overall economic expansion should increase steadily, according to the announcement. The strategy also calls for investment spending to shift more heavily toward social welfare priorities to reinforce household confidence and increase purchasing power.
