China's people-centered policies drive economic growth and well-being

Editor's note: Xie Huihua is a research fellow at the School of Economics of Zhejiang University of China. The article reflects the author's opinions and not necessarily the views of CGTN.

China's latest figures on total retail sales of consumer goods released on Monday indicate that retail sales across China grew by 4 percent year on year during the first two months of this year – an improvement of 0.5 percentage point compared with the full-year growth in 2023. 

This highlights a notable rebound in the Chinese consumer market. 

Regionally, both urban and rural markets have been on the mend in tandem, further bridging the urban-rural divide. 

A closer look at specific consumption categories reveals that so-called "upgraded" consumer goods – spanning sports and entertainment products, communication devices, and cultural and office supplies – recorded vigorous double-digit growth.

Meanwhile, essentials like grain and oil, food, tobacco and alcohol, and daily-use items have continued to register steady gains. 

Significantly, online retail sales of physical goods climbed by 5 percent, outstripping overall growth and reflecting the enduring strength of e-commerce. 

Taken together, the data suggest a consumer market on a steady upward trajectory, undergoing structural refinement and reinforcing government objectives to promote well-being alongside economic expansion.

This year's Chinese government work report explicitly underscores a people-centered approach to macroeconomic policy, steering the focus of economic measures toward enhancing livelihoods and spurring consumption, thus smoothening the flow of the economic cycle. 

Through targeted strategies – allocating 300 billion yuan (about $41.5 billion) in ultra-long-term special bonds to foster "old-for-new" consumer-product exchanges, promoting income growth via multiple channels, providing tax and fee relief for low- and middle-income households, and expanding healthcare, elder care, childcare and housekeeping services – the government seeks to optimize the consumer environment and bolster purchasing power. 

From a policy viewpoint, strengthening inclusive and foundational social investments heightens public confidence and secures fundamental consumption needs. 

At the same time, prompting consumers to replace outdated goods while broadening employment avenues helps shift consumption patterns toward higher-value goods and services, creating fresh engines for economic development.

An analysis of the newly published retail data shows that consumption upgrades and fundamental needs jointly underpin a stable recovery in the consumer market.

Sports and entertainment products, communication devices, and cultural and office supplies posted double-digit growth rates (25 percent, 26.2 percent, and 21.8 percent, respectively), reflecting a surge in high-quality, diversified consumption against a backdrop of rising incomes and an improving willingness to spend. Stable increases in essentials such as grain and oil (11.5 percent) demonstrate the resilience of households' inelastic demand. 

This complementary mix of "upgraded" and "essential" categories steadies overall macroeconomic performance while enhancing living standards. 

Meanwhile, rural retail sales grew by 4.6 percent, outpacing the 3.8 percent rise in urban areas – a pattern aided by more robust e-commerce infrastructure and smoother pathways for agricultural goods. 

The result is increasing momentum in grassroots markets and tangible improvements of the quality of life for rural residents.

People-centered macroeconomic policies, however, should not be confined to quick fixes in consumption. 

Rather, they must work toward a durable framework for improving quality of life in the long run. 

China's 2025 government work report calls to support and lighten the burden on lower-income groups, expand service industries such as elder care, childcare and housekeeping, and ramp up policy assistance in employment, education and healthcare. It aims squarely at shoring up social safety nets and enhancing overall expectations – key factors that stoke consumer confidence. 

Simultaneously, fostering consumption-industry linkages through emerging sectors and service advancements encourages faster product and technology innovation, promoting balanced progress on both supply and demand fronts. 

Overall, China is injecting sturdier and more dependable momentum into its consumer market by refining its people-oriented macroeconomic policies. 

With continued efforts to consolidate gains in rural revitalization, diversify income sources and upgrade the service sector, it is likely that both urban and rural consumer capacity – and the willingness to spend – will grow steadily. 

The newest consumption data confirm that the trajectory of recovery and upgrade remains on course, further energized by the recent issuance of the special action plan on consumption revitalization. 

By building on endeavors to improve social security, incentivize supply-side innovation, and stabilize employment and income, these policies will strengthen consumption's role in driving economic growth and amplify its positive spillover for people's well-being. 

In so doing, they lay the groundwork for a virtuous cycle that binds the economy and social welfare more closely, paving the way for sustainable high-quality development in China.