China has unveiled a series of new stimulus measures aimed at boosting consumption and driving growth in its service sectors. Policymakers have outlined plans to expand domestic demand and enhance investment efficiency, signaling a renewed commitment to invigorate the nation’s economy.
According to a government work report submitted on Wednesday to the national legislature, one of the key initiatives includes the issuance of 300 billion yuan ($41.7 billion) worth of ultra-long-term special bonds. These bonds are intended to support a nationwide consumer goods trade-in program, encouraging consumers to upgrade and invest in new products.
Li Yunze, head of the National Financial Regulatory Administration, emphasized the role of financial institutions in this push. In an interview after the opening meeting of the third session of the 14th National People’s Congress, he stated that financial institutions will be encouraged to tailor financial products to better meet diverse consumer needs. This includes exploring ways to raise credit limits and extend loan terms for long-term, high-value consumption.
Beyond financial incentives, China is aiming to broaden access and reduce restrictions in sectors such as healthcare, elderly care, childcare, and domestic services. The goal is to drive multi-faceted consumption growth by making it easier for consumers to access essential services.
“China’s strategy in recent years has focused on expanding domestic demand,” said Zeng Gang, director of the Institute for Urban Development at East China Normal University, in an interview with YICAI, a Shanghai-based business news outlet. “While boosting big-ticket purchases remains important, there is a growing emphasis on service consumption, which marks a significant shift.”
The authorities are also aiming to stimulate new consumption trends by fostering digital, green, and smart consumer markets. This includes promoting technologies and products that are environmentally friendly and leveraging digital platforms to enhance consumer experiences.
These measures appear to be yielding positive results. China’s consumer spending has continued to gain momentum, with final consumption expenditure contributing 44.5 percent to economic growth, adding 2.2 percentage points to the country’s GDP. Service consumption has grown rapidly as well, with per capita spending on services reaching 13,016 yuan, up 7.4 percent from the previous year.
The renewed focus on consumption and services is seen as a strategic move to ensure sustainable economic growth. By empowering consumers and reducing barriers in key service sectors, China aims to create a more robust and resilient domestic market.
