Yu Weiping: The Strategic Significance and Practical Requirements of Vigorously Boosting Consumption
Consumption is the "ballast stone" and primary driver of economic growth. General Secretary Xi Jinping attaches great importance to expanding consumption, emphasizing the need to "speed up the patching of shortfalls in domestic demand, especially in consumption, so that domestic demand becomes the primary driving force and stabilizing anchor for economic growth." The Central Economic Work Conference [1] held at the end of last year identified the key tasks for economic work in 2026, the first of which is to "adhere to the dominance of domestic demand and build a strong domestic market." The "Proposals" of the Fourth Plenary Session of the 20th CPC Central Committee [2] called for "vigorously boosting consumption." This is a scientific judgment and strategic deployment made by the CPC Central Committee with Comrade Xi Jinping at its core, based on a profound grasp of the general trends of development both at home and abroad; it highlights the major significance of boosting consumption for advancing Chinese-path modernization. We must earnestly study, deeply comprehend, and ensure the effective implementation of these directives.
Vigorously Boosting Consumption is of Great Strategic Significance
Consumption is the foundation of the national economy and an important engine for driving economic growth. The report to the 20th CPC National Congress proposed "enhancing the foundational role of consumption in economic development"; the "Decision" of the Third Plenary Session of the 20th CPC Central Committee proposed "improving the long-term mechanisms for expanding consumption"; and the "Proposals" of the Fourth Plenary Session of the 20th CPC Central Committee proposed "adhering to the strategic base point of expanding domestic demand, persisting in the close integration of benefiting people's livelihoods with promoting consumption, and of investing in physical assets with investing in people," as well as "expanding effective investment." This fully reflects the consistent importance placed on boosting consumption and expanding domestic demand by the CPC Central Committee with Comrade Xi Jinping at its core. We must profoundly recognize the significant practical meaning and far-reaching strategic considerations of vigorously boosting consumption.
A proactive choice following economic laws. General Secretary Xi Jinping pointed out: "Development must be scientific development that follows economic laws." Consumption plays a foundational role in economic development; this is a general law of economic development. Looking at world economic history, when a country enters the late stages of industrialization and urbanization, the demand for large-scale investment and construction declines, and the efficiency, rate of return, and driving effect of investment gradually slip. Economic development must then transition to a new stage where consumer demand serves as the primary driver. During the process of moving from the upper-middle-income stage to the high-income stage, the leading role of consumption in driving economic growth in major advanced economies has strengthened significantly. As a large developing country with a population of over 1.4 billion, China is at a critical stage of moving toward high-income status. Placing the boosting of consumption in a more prominent position is both a proactive move and a necessity dictated by these laws. For a major power, relying on a massive domestic market and a complete industrial system provides the fundamental support for boosting consumption and expanding domestic demand, which helps in navigating major power competition and external shocks. Vigorously boosting consumption and expanding domestic demand helps leverage China's unique advantage of an economy dominated by domestic demand and internal circulation, promoting sustained and healthy economic development while maintaining an effective improvement in quality and reasonable growth in quantity. Particularly given the current complex and volatile external environment, vigorously boosting consumption can ensure the normal operation of the economy and general social stability under extreme conditions, allowing us to firmly grasp the initiative in development.
A strategic choice for constructing the New Development Paradigm. General Secretary Xi Jinping pointed out: "To construct the New Development Paradigm, we must adhere to the strategic base point of expanding domestic demand." International experience shows that being domestic-demand-driven and consumption-engineered are prominent characteristics of a major power's economy. Consumption is the final demand; it is the organic unification of the end-point and the new starting point of a nation's economic cycle. It can string together the links of production, distribution, and circulation, enabling the economic system to collaborate closely and operate efficiently. The core logic of vigorously boosting consumption lies in "heating up" the economy by making consumption "warm up," forming a spiral of consumption leading production innovation, and production supply creating new consumption, thereby injecting continuous endogenous growth momentum into economic development. The "15th Five-Year Plan" period [3] is a critical period for basically achieving socialist modernization, during which the status and role of boosting consumption and expanding domestic demand will become even more prominent. Internationally, as the complexity, severity, and uncertainty of the external environment rise, the growth model of the past—which relied on investment and exports as the primary drivers of economic growth—needs to be adjusted. Domestically, the current characteristic of "strong supply and weak demand" is relatively obvious, making the role of consumption as the "main engine" of economic growth and the "ballast stone" of economic stability even more prominent. Patching the consumption shortfall has become an inevitable choice. China is the world's most potential consumer market, harboring enormous room for growth. Vigorously boosting consumption is the key to smoothing the national economic cycle; it is also conducive to gathering global resource elements and making good use of both domestic and international markets and resources to expand new space for economic development.
An inherent requirement for practicing the people-centered development philosophy. General Secretary Xi Jinping pointed out: "The people's aspiration for a better life is our goal." Consumption links the macroeconomy on one end and the daily lives of ordinary people on the other; it is both an important driver of economic growth and a direct manifestation of the people's needs for a better life. Vigorously boosting consumption means specifically working to improve the people's standard of living, allowing the masses to share the fruits of economic and social development through consumption channels. This is a concrete interpretation of development for the people, development relying on the people, and development fruits shared by the people; it is also an important yardstick for measuring the "quality" of economic growth. Currently, China has entered the stage of high-quality development, with per capita Gross Domestic Product (GDP) exceeding $13,000. The masses have higher expectations for a better life, and the expansion and upgrading of consumer demand is the general trend. Consumption hotspots such as smart wearable products, cosmetics, fitness equipment, outdoor goods, pet food and supplies, baby products, "designer toys" (chǎowán), jewelry, and "China-Chic" (guócháo) [4] apparel are emerging one after another. Vigorously boosting consumption, enriching the supply of goods and services, and raising consumption levels can continuously improve people's well-being and enhance the people's sense of gain, happiness, and security, allowing the achievements of Chinese-path modernization to benefit all people more extensively and fairly.
Accurately Assessing the Growth Space and Development Trends of China’s Consumption
In recent years, China's consumer market has developed rapidly. In 2024, the total retail sales of consumer goods reached 48.3 trillion yuan, and in 2025 it exceeded 50 trillion yuan, steadily maintaining its position as the world's second-largest consumer market. In 2025, the contribution rate of domestic demand to economic growth exceeded 67%, with the contribution of consumption reaching 52%. At the same time, we must see that the potential for consumption growth in China remains large. The Central Economic Work Conference held at the end of last year put forward the "Five Musts" [5]—a summary of our regular understanding—the first of which is the must to fully tap into economic potential. This requires us to accurately assess the growth space and development trends of China's consumption.
From the perspective of international comparison, China's household consumption rate is generally low, and the consumer market has significant room for growth. Currently, China's household consumption rate is about 40%, which still lags 10–20 percentage points behind developed countries, particularly in the low proportion of service consumption. Considering the high savings tradition of Chinese residents, there is still huge room for improvement in future consumption. It should be recognized that economic fundamentals are the basis for the growth of the consumer market. For example, the stability of the labor market is the cornerstone of income security; it not only directly enhances residents' willingness and ability to consume but also stabilizes people's expectations for future life, thereby releasing consumption potential. Furthermore, the improvement in the quality of manufacturing and service industries can provide more high-quality and personalized products and services, stimulating consumer demand and forming a virtuous cycle where supply creates demand. China's economic foundation is solid, its advantages are many, its resilience is strong, and its potential is great; the supporting conditions and basic trend for long-term improvement have not changed. Although boosting consumption still faces some difficulties—such as the relatively low proportion of disposable income, unstable income expectations, weak willingness to consume, and structural shortages in high-quality consumer supply—these are mostly problems of development and transition, which can be solved through effort. By strengthening confidence, utilizing advantages, responding to challenges, and continuously consolidating and expanding the momentum of economic stability and improvement, we can increase income and reduce burdens to enhance consumption capacity, use high-quality supply to create effective demand, and optimize the consumption environment to strengthen the willingness to consume. The potential for consumption will surely be further stimulated.
From the perspective of supporting factors, the growth of urban and rural residents' income and the in-depth advancement of new-type urbanization will drive the further expansion and quality improvement of the consumer market. This is mainly reflected in three aspects. First, the steady growth of resident income consolidates the foundation of consumption. During the "14th Five-Year Plan" period, the per capita disposable income of Chinese residents grew by an annual average of 5.4% in real terms, basically in sync with economic growth. Meanwhile, the ratio of per capita disposable income between urban and rural residents dropped from 2.56 in 2020 to 2.31 in 2025. China has built the world's largest education, social security, and healthcare systems; economic growth has been tangibly transformed into the people's sense of gain, happiness, and security. As income further grows and the income gap narrows, the expansion of the consumer market will have a solid foundation. Second, the expansion of the middle-income group drives consumption upgrading. China possesses the world's largest and most developmental middle-income group. Along with the solid advancement of high-quality economic development and common prosperity for all people, the scale of the middle-income group will further expand, pushing consumption to a new level. Third, the steady advancement of new-type urbanization expands consumption space. It is estimated that for every 1 percentage point increase in China's urbanization rate, more than 200 billion yuan of new consumer demand can be added annually. In 2025, the urbanization rate of China's permanent population was 67.89%, which will further increase in the future. At the same time, the urbanization rate of the registered (hukou) population is lower than that of the permanent population. As the registered population urbanization rate steadily rises, the scale of household consumption will expand further.
From development trends, the qualitative upgrading of consumption structures will fully stimulate the growth potential of domestic demand. Currently, China's per capita GDP has exceeded $13,000, and household consumption is in a stage of accelerated upgrading toward developmental and quality-oriented types. This structural upgrading will bring enormous growth potential for domestic demand. First, commodity consumption is upgrading toward high quality. With the rise in income and the innovation of consumption concepts, commodity consumption will upgrade from survival-oriented to improvement-oriented and developmental types; there is great potential in durable consumer goods, high-quality living, and personalized needs. For example, at the end of 2025, the number of private cars per 100 households in China reached 52.9, which is lower than the level of countries like Germany at the same stage of development, indicating room for growth. Second, service consumption has great potential. International experience suggests that consumption structures generally follow a path from "non-durable goods to durable goods to service consumption." The period when per capita GDP rises from $10,000 to $30,000 is the "golden period" for the development of service consumption. In some developed countries at this stage, the proportion of service consumption increased to varying degrees. Along with the continuous improvement of China's service supply, demand for service consumption in medical care, elderly care, and other sectors will rise rapidly. Third, the potential of new types of consumption is being released at an accelerated pace. In recent years, China's demand for new types of consumption has been robust, showing strong momentum and vitality. Guided by technological drivers and scientific empowerment, digital, green, and health consumption will grow rapidly. Since the start of the "14th Five-Year Plan," China has continuously promoted the high-quality development of e-commerce, with the overall scale of digital consumption exceeding 23.8 trillion yuan, remaining the world's largest online retail market for over ten consecutive years. Looking forward to the "15th Five-Year Plan" and the longer term, digitalization will continue to integrate into all fields of production and life, further opening up broad space for new consumer markets.
Firmly Grasping the Practical Requirements for Vigorously Boosting Consumption
The Central Economic Work Conference held at the end of last year proposed to "deeply implement the special action to boost consumption," which will continuously release consumption potential, promote the sustained, stable, and healthy development of the consumer market, and further enhance the foundational role of consumption in economic growth. To this end, we must focus on household consumption as the priority, scientifically coordinate supply and demand, lead new supply with new demand, create new demand with new supply, and promote a virtuous interaction between the two; scientifically coordinate the present and the long term, basing ourselves on the present by researching and introducing powerful measures to promote consumption in a timely manner—sending out "real money" policy warmth and market signals—while looking to the long term by improving the policy system for boosting consumption and consolidating the institutional foundation for expanding consumption; scientifically coordinate universality and precision, both improving universal support policies that reach consumers directly and providing targeted tilt toward consumption by key groups and in key areas; and scientifically coordinate market unification with local adaptation, giving play to the initiatives of both the central and local governments, steadily promoting the unification of rules and systems for the large consumer market, breaking down market fragmentation, and simultaneously encouraging local governments to take proactive responsibility and introduce consumption-promoting measures that fit local realities. Specifically, efforts should be focused on the following areas.
Improve resident income and enhance the consumption capacity of the residents, so that the masses...
"Ability to consume." Consumption is a function of income; the capacity and willingness of residents to consume depend largely on the state of employment and income growth. The Central Economic Work Conference [6] held at the end of last year proposed "formulating and implementing plans to increase the income of urban and rural residents." To implement this requirement, we must coordinate the objectives of promoting employment, increasing income, and stabilizing expectations, employing multiple measures to enhance the consumption capacity of residents. We must improve the income distribution system, upholding the principle of distribution according to work as the mainstay while allowing multiple forms of distribution to coexist. We must improve the mechanisms for determining laborers' wages, ensuring reasonable growth and guaranteed payment, and increase the share of resident income in the distribution of national income, as well as the share of labor remuneration in primary distribution [7]. We should expand the size of the middle-income group and make solid progress toward common prosperity. We must thoroughly implement the employment-first strategy, improve the mechanism for promoting employment, strengthen the synergy between industry and employment, and stabilize and expand employment through multiple channels. We should optimize the policy environment for promoting employment through entrepreneurship, increase efforts to stabilize corporate staffing in accordance with changing conditions, and actively support high-quality and full employment for key groups such as college graduates and migrant workers.
Improving people's livelihoods and removing their anxieties will allow the masses to "dare to consume." The social security system serves as a safety net for people's lives and a stabilizer for social operations. The Central Economic Work Conference at the end of last year proposed to "persist in prioritizing people's livelihoods and strive to accomplish more practical deeds for the masses," and made key deployments to this end. Improving the social security system is conducive to enhancing residents' willingness to consume. We must accelerate the development of a multi-tiered and multi-pillar old-age insurance system; increase the participation rates of flexible employees, migrant workers, and those in new forms of employment; improve the multi-tiered medical security system; and expand the coverage of unemployment and work-related injury insurance. We must persist in "doing our best while acting within our means" [8], ensuring that the improvement of livelihoods is commensurate with the level of economic development—neither lagging behind economic growth nor attempting things that exceed the current stage of development. We should rationally increase the proportion of public service expenditures in fiscal spending and steadily increase investment in key livelihood areas such as education, healthcare, elderly care, birth and childcare, and housing. We must steadily advance the equalization of basic public services, refine the scope and content of basic public services, focus on increasing investment in inclusive, foundational, and "bottom-line" livelihood construction [9], narrow the gap in basic public services between regions and between urban and rural areas, and achieve a better integration of benefiting the people with promoting consumption.
Expanding the supply of high-quality goods and services to meet diversified consumption needs will allow the masses to "desire to consume." Only by closely integrating the improvement of people's livelihoods with the promotion of consumption and expanding the supply of high-quality goods and services can we better meet the diversified consumption needs of residents. The Central Economic Work Conference at the end of last year proposed "expanding the supply of high-quality goods and services." To implement this requirement, we must focus on relaxing market access and promoting the integration of business formats to expand service consumption. We can work around policy support, promotional activities, platform carriers, opening-up to the outside world, standard-setting leadership, and the development environment to actively develop new consumption formats, products, and models. We should strengthen brand leadership, upgrade standards, and apply new technologies to promote the expansion and upgrading of commodity consumption. We must actively create a favorable atmosphere and optimize the environment to promote the integrated development of commerce, tourism, culture, and sports, creating a batch of new consumption scenarios with broad driving influence and high visibility to stimulate the vitality of the consumer market. We should cultivate international consumption center cities and expand inbound consumption. Furthermore, we must regulate market order, maintain a fair and orderly consumption environment, strengthen the protection of consumer rights, and establish efficient and convenient channels for consumer rights advocacy.
We must improve the systems and mechanisms for boosting consumption, actively release market signals that strongly support consumption, and effectively stimulate the consumption potential of residents. Promoting consumption is a systemic project [10] that requires cooperation from multiple parties to form a synergy. We must strengthen the coordination of fiscal, tax, financial, industrial, and investment policies with consumption policies to build a policy system more conducive to promoting consumption. We should coordinate the use of policy tools such as fiscal subsidies and interest discounts on loans, increasing the intensity of inclusive policies that directly reach consumers. We must establish and improve management methods adapted to new consumption formats, models, and scenarios, and refine market supervision procedures. We should implement paid leave and staggered vacations to promote holiday consumption. Finally, we must improve the evaluation mechanism for consumption policies, deeply analyzing the support effects of policies on commodity consumption, service consumption, urban consumption, and rural consumption to continuously enhance the effectiveness and precision of policies aimed at boosting consumption.
(The author is the Deputy Director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference) Source: People's Daily (January 26, 2026) Editor: Huihui