China's Minister of Commerce Wang Wentao announced a comprehensive plan to stimulate domestic consumption at a press conference in Beijing on Friday, as the country seeks to strengthen its position as one of the world's largest consumer markets.

The announcement came during an economic-themed press conference of the fourth session of the 14th National People's Congress, where Wang highlighted the significant transformation of China's consumer landscape over the past five years.

An evolving consumer market

According to Wang, China's consumer market has grown to become the second largest in the world by nominal value, with total retail sales of consumer goods surpassing 50 trillion yuan (approximately $6.9 trillion). When measured by purchasing power parity, China already ranks first globally.

The minister noted that service consumption has also seen robust growth, particularly in experience-based spending. Chinese consumers are increasingly willing to pay for new experiences, hobbies and wellness. Service retail sales grew at an average annual rate of 10.4% between 2022 and 2025.

The recent Chinese New Year holiday provided a glimpse into China's evolving consumption patterns. The nine-day celebration was characterized by what Wang described as strong festive atmosphere, high popularity, trendy technology and booming markets.

Three-pillar strategy for consumption growth

The Central Economic Work Conference and the Government Work Report have identified expanding domestic demand as the top priority for this year. Wang outlined three key areas of focus.

First, goods consumption will receive continued support through the trade-in program. The government has allocated 250 billion yuan in ultra-long special treasury bonds to support consumers replacing old products with new ones. Additionally, the government will pilot new consumption models in 50 cities, including the capital city of Beijing, with dedicated central government funding, focusing on the "debut economy," cross-sector integration and immersive consumer experiences.

The debut economy refers to a wide range of activities in which brands launch new products or services on specific platforms with the aim of attracting attention and fueling consumption through new, unique experiences.

Second, service consumption will be expanded through a "6+3" framework targeting six key areas: transportation, domestic services, online audiovisual content, travel and residence, automotive aftermarket, and inbound consumption. Three potential growth areas have also been identified: art performances, sports events and experiential services.

Third, lower-tier markets, representing smaller cities and counties, will receive targeted support. These regions account for over 70% of China's population and 60% of both GDP and retail sales, yet their consumption potential remains underdeveloped.

"China is a vast country with different regions having different population and economic scales," Wang explained. "We will implement targeted policies for each category."