Consumers queue up in a Shanghai shopping mall to grab a bite on April 4, 2025./ VCG
In 2025, China is promoting consumption and expanding domestic demand through a range of initiatives. The country is steadily opening up its service sector, focusing on the evolving needs of its residents. This includes encouraging the import of high-quality life services such as healthcare and cultural entertainment, injecting new vitality into the consumer market.
According to the China Financial 40 Forum's first-quarter 2025 macro policy report released on Monday, while the Chinese economy continues to face demand challenges, some improvement in cash flow has been observed across various sectors. The real estate market is showing divergent trends: while first-tier cities are seeing signs of stabilization and recovery in residential sales and prices, second- and third-tier cities remain in a phase of adjustment. Chinese exports have remained robust so far, with limited impact from tariff-related pressures.
To address ongoing challenges, the report recommends a series of policy measures, including accelerating domestic demand expansion through public investment and key reform breakthroughs; stabilizing stock and foreign exchange markets to reduce excessive emotional fluctuations; maintaining dialogue while opposing the US's "maximum pressure" and "excessive demands"; providing necessary support for affected workers and enterprises; and fostering a more favorable domestic and international environment for business transformation.
The 5th China International Consumer Products Expo concluded in Haikou, Hainan on April 18, 2025./ VCG
Huang Yiping, dean of the National School of Development at Peking University, noted that current consumption-promoting policies will have a positive and lasting impact on China's consumer market. Countercyclical policies help stabilize economic growth and create a supportive macroeconomic environment for consumption.
Additionally, policies aimed at encouraging fertility, developing metropolitan areas, and facilitating the settlement of migrant workers not only broaden the consumer base but also enhance consumption capacity. Over the long term, these strategies are expected to drive sustained prosperity in the consumer market and support sustainable economic development.
Zhang Bin, the deputy director of the Institute of World Economics and Politics (IWEP) at the Chinese Academy of Social Sciences, emphasized that expanding domestic demand should prioritize boosting GDP growth through countercyclical measures, thereby simultaneously increasing income and consumption.
In the short term, the focus should be on lowering policy interest rates and expanding public investment to stimulate economic activity, enhance employment opportunities, raise household income, and ultimately drive consumption growth.