China boosts consumption with new stimulus push, eyes services boom

China has reiterated its commitment to bolstering consumption as a key driver of economic growth, with policymakers unveiling measures to expand domestic demand and improve investment efficiency, according to a government work report submitted on Wednesday to the national legislature for deliberation.

The annual government work report highlighted the issuance of a 300 billion yuan ($41.7 billion) worth of ultra-long-term special bonds to support a nationwide consumer goods trade-in program.

Li Yunze, head of the National Financial Regulatory Administration, told reporters during an interview after the opening meeting of the third session of the 14th National People's Congress that financial institutions would be encouraged to tailor financial products to better meet diverse consumer needs. Chinese authorities are also exploring ways to raise credit limits and extend loan terms for long-term, high-value consumption.

Beijing is also pushing for broader access and fewer restrictions in sectors such as healthcare, elderly care, childcare, and domestic services to drive multi-faceted consumption growth.

"China's strategy in recent years has focused on expanding domestic demand. While boosting big-ticket purchases remains important, there is a growing emphasis on service consumption, which marks a significant shift," Zeng Gang, director of the Institute for Urban Development at East China Normal University told YICAI, a Shanghai-based business new outlet.

Additionally, Chinese authorities aim to stimulate new consumption trends by fostering digital, green, and smart consumer markets.

In 2024, under a package of stimulus measures, China's consumer spending continued to gain momentum. Final consumption expenditure contributed 44.5 percent to economic growth, adding 2.2 percentage points to the country's GDP. Service consumption also grew rapidly, with per capita spending on services reaching 13,016 yuan, up 7.4 percent from 2023.