China announced a major policy initiative, aiming to stimulate consumer spending and drive economic growth through enhanced household incomes, strengthened markets, and targeted social support.
The new plan, comprising 30 policies organized into eight sections, emphasizes both demand-side and supply-side strategies. Deputy Director of the National Development and Reform Commission (NDRC), Li Chunlin, highlighted that despite retail sales growth of 4% year-on-year in the first two months of 2025, consumer confidence remains weak, necessitating further action.
Stabilizing Stocks and Real Estate
For the first time, China’s consumption strategy explicitly includes stabilizing the stock and real estate markets. Historically, the country’s economic policies focused predominantly on supply-side adjustments. However, this plan emphasizes boosting consumer income and easing financial burdens to directly encourage demand.
To enhance household incomes, the government plans to promote wage increases and adjust minimum wages. Property incomes will also receive attention through measures to stabilize stock markets and facilitate long-term fund investment from institutions such as commercial insurance, the national social security fund, and basic pension insurance.
In the housing market, policymakers aim to reverse recent downturns by encouraging medium- and long-term capital flows and maintaining supportive financial conditions. Recent measures such as mortgage rate cuts, reduced down payments, eased purchasing restrictions, and improved developer financing will continue.
Connecting Consumption with Social Goals
The plan ties consumer spending directly to broader social objectives like elder care, child care support, and improved work-life balance, reflecting an integrated strategy to enhance both economic growth and quality of life.
In 2025, China will issue ultra-long special treasury bonds worth 300 billion yuan (approximately US$41.67 billion), doubling the 2024 amount, to support consumer goods trade-in programs. Such programs previously boosted durable goods sales by over 1.3 trillion yuan, significantly driving investment growth.
Supporting Employment and Social Welfare
Following its “employment-first” policy, the government will allocate 66.74 billion yuan in employment subsidies in 2025 to support job creation and entrepreneurship initiatives. Additionally, a proposed child care subsidy system aims to extend childbirth insurance to rural migrant workers and individuals in flexible employment arrangements.
To further support elderly care, fiscal subsidies for basic pension and medical insurance coverage will increase in 2025, with adjustments planned for retiree benefits.
The government is also reinforcing workers’ rights by enforcing paid annual leave and preventing the unlawful extension of working hours.
Overall, China’s latest consumption plan reflects a comprehensive approach aimed not just at immediate economic stimulation, but also at ensuring sustainable growth and improving living standards nationwide.
