China has launched an ambitious technological strategy to revitalize domestic consumption, positioning artificial intelligence as the cornerstone of its economic revitalization plan. The comprehensive action plan, unveiled recently by Beijing, aims to generate multitrillion-yuan consumption growth within three years across targeted sectors including elderly care products, smart vehicles, and consumer electronics.
The initiative represents a supply-side approach to stimulating demand, with AI serving both as practical tool and symbolic centerpiece. The blueprint promotes smart appliances that automate shopping decisions and AI wearables that guide daily activities, presenting technological sophistication as the primary catalyst for consumption revival.
However, this technologically-driven strategy exposes a fundamental tension in China’s economic planning: the assumption that supply can effectively generate demand. Current economic fragility underscores the challenge—retail sales have shown volatility throughout 2024-2025, youth unemployment remains elevated despite statistical adjustments, and household savings rates persist at historically high levels.
The critical obstacle lies not in product inadequacy but in consumer psychology. Chinese households have restrained spending due to weakened income visibility and persistent economic anxiety rather than technological deficiencies in available products. While China leads globally in smart home adoption, EV penetration, and digital payment usage, these advancements struggle to overcome fundamental financial concerns.
The elderly care sector exemplifies this dichotomy. With over 300 million citizens aged 60+, AI-enabled monitoring and assistive devices offer transformative potential. Yet adoption will be determined more by affordability through pension strength and healthcare support than by technological sophistication.
Implementation challenges further complicate matters. Local governments face execution burdens amid existing debt pressures, while private enterprises confront margin compression and cautious lending. Tech roadmaps appear more developed than financial mechanisms to support the ambitious transformation.
Ultimately, sustainable consumption revival may require addressing foundational elements: robust job creation, wage growth, and strengthened social safety nets. Until policy moves beyond supply-side engineering to strengthen household financial security, innovation may flourish while broad-based consumption recovery remains elusive.