China has rolled out a comprehensive national strategy aimed at optimizing the match between the supply and escalating demand for consumer goods, a critical initiative designed to unlock the full potential of its massive domestic market and provide sustained vitality for the world’s second-largest economy. The plan, jointly unveiled by the Ministry of Industry and Information Technology (MIIT) and five other key government agencies on November 28, outlines detailed measures to energize consumption sectors, promote industrial modernization, and enhance the quality and diversity of available products through 2030.
This policy reflects Beijing’s sustained focus on making domestic demand the primary engine of economic growth, particularly as final consumption expenditure contributed 53.5% to China’s economic growth in the first three quarters of this year, significantly up from 44.5% for all of 2024. The strategy emphasizes a coordinated approach to expanding domestic demand while deepening supply-side structural reform.
Fostering New Consumption Ecosystems
The core of the new plan centers on cultivating emerging consumption categories and elevating product standards. Key measures include fostering novel sectors such as smart homes and green construction materials, promoting the upgrading of consumer durables in rural areas, and increasing the availability of specialized items, ranging from winter sports equipment and popular toys to essential supplies for infants and the elderly.
MIIT deputy head Xie Yuansheng recently noted that China’s consumer goods industry has entered a new phase where quality is intrinsically linked to value. He stressed that improving supply-demand synchronization is the most effective way to unleash the nation’s immense spending power.
High-value, specialized markets are targeted for rapid expansion. By 2027, the plan aims to form three consumption sectors, each exceeding a trillion yuan (approximately $141.24 billion): elderly care products, intelligent connected vehicles (ICVs), and consumer electronics. Furthermore, the government intends to foster ten additional consumption hotspots, each projected to reach 100 billion yuan in value, covering areas such as smart wearables, cosmetics, fitness equipment, and pet-related goods.
Driving Industrial Upgrading and Virtuous Cycle
Analysts view the policy move as vital for long-term economic health. Liu Xiangdong, a researcher at the China Center for International Economic Exchanges, emphasized that aligning supply and demand will spur industrial upgrades. This, he argues, will create a “virtuous cycle” where new demand stimulates supply-side innovation, ensuring positive reciprocal actions between consumption and investment.
Boosting consumption is a central pillar of China’s policy agenda for 2025 and is reinforced by preliminary recommendations for the 15th Five-Year Plan (2026-2030). These documents indicate that Beijing aims to substantially increase the share of household consumption in GDP, solidifying domestic demand’s role as the principal driver of growth over the next five years.
Previous government efforts to stimulate spending have already yielded results. An expanded consumer goods trade-in program, coupled with increased consumer finance and enhanced employment support, has stimulated significant sales. The trade-in program alone has driven over 2.4 trillion yuan in cumulative sales of products like new energy vehicles and home appliances during the first ten months of this year. Supported by these initiatives, retail sales, a key indicator of consumption health, maintained a stable 4.3% year-on-year growth during the January-October period.
The latest plan signals a proactive pivot toward targeted, high-quality growth, ensuring that China’s manufacturing base is better equipped to meet the increasingly sophisticated needs of its rapidly evolving consumer base.