China is implementing a dual-pronged approach to stimulate consumer spending, combining immediate financial measures with long-term structural reforms as the nation shifts toward a domestic demand-driven economic model. This strategic pivot comes as November retail sales growth slowed to 1.3% year-on-year, down 1.6 percentage points from October’s figures.
The recently concluded Central Economic Work Conference positioned “boosting domestic demand” as the foremost priority for China’s 2026 economic agenda. President Xi Jinping emphasized in a Qiushi Journal article that expanding domestic demand constitutes both an economic stability mechanism and a national security imperative, characterizing it as a strategic rather than temporary measure.
In concrete action, China’s Ministry of Commerce, People’s Bank of China, and National Financial Regulatory Administration jointly issued policy directives strengthening financial support for consumer spending. The measures encourage refined financial services for big-ticket purchases and innovative products targeting service sectors including elderly care, catering, tourism, and education.
Financial analysts view this timing as strategically significant. “Front-loading such support weeks before the new year is designed to secure early economic momentum,” noted Dong Ximiao, Chief Researcher at Merchants Union Consumer Finance Co., adding that positioning ahead of February’s Spring Festival shopping season leverages peak consumption periods.
The approach combines targeted financial support with extended trade-in programs that have already generated substantial impact. Ministry of Commerce data reveals that from January to November 2025, trade-in initiatives drove sales exceeding 2.5 trillion yuan ($355 billion), benefiting over 360 million citizens. Analysts project expansion of these programs in 2026 to include AI-enhanced products, with proposed funding increases from 300 billion to 500 billion yuan.
Beyond immediate stimuli, economists stress that sustained consumption growth requires deeper structural reforms. These include boosting household incomes, strengthening social safety nets, and improving livelihoods. The policy focus is evolving from simple stimulus to enhancing both capacity and willingness to spend, potentially through adjusted income tax thresholds, maintained social welfare spending, and high-quality employment policies.
Concurrently, China is promoting inbound consumption through its “Shopping in China” campaign, facilitated by visa-free policies and instant tax refunds for eligible international travelers. Former WTO Chief Economist Robert Koopman observed that China’s evolution into a major demand center will represent a significant transformation in its global economic role over the next decade.