Just a few weeks ago, Beijing announced China’s first independent five-year consumer stimulus plan. If successful, the Chinese economy stands to benefit in multiple aspects, but the initiative raises doubts. The consumer stimulus plan itself underestimates the necessity of stimulating consumption, and such efforts have long been unconvincing due to their historical failures.
In unveiling the new plan, the National Development and Reform Commission (NDRC) and the Ministry of Commerce jointly issued a statement emphasizing the importance of reviving household consumption capability to ensure future stability and prosperity of the Chinese economy.
Previous plans had mentioned the need to increase household expenditure, including the “14th Five-Year Plan” covering 2021 to 2025, but had not produced separate documents on the matter. This change may indicate a special commitment from Beijing and perhaps reflects a more urgent need than previously anticipated.
The latest research indicates that the consumer service industry, especially in areas like elderly and childcare services, as well as tourism and sports industries, have the greatest potential for development. The report also mentions automobile sales and real estate development. Considering China’s ongoing real estate crisis under the Communist regime for the past five years, the latter point is quite surprising.
Unsurprisingly, this plan, like many other plans formulated by the Chinese Communist regime on various issues, is big on talk, clear on goals, but lacks concrete actions to achieve those goals.
Its goals are not particularly ambitious. The document calls for a 10 trillion yuan increase in household consumption expenditure by 2030 for the next five years, reaching a total of 60 trillion yuan (approximately 8.85 trillion US dollars). This implies an annual growth rate of only 3.66%, below the 5% annual growth rate target set by the Ministry of Commerce in the previous five-year plan.
Even if China fails to achieve this target, increasing household expenditure to the new, more moderate target level is still insufficient to meet the need for the economy to transition towards household spending. Growth rates in other industries are almost certain to continue surpassing this level. Wang Peicheng, a senior stock index futures analyst at Orient Futures, after reviewing the plan, stated that Beijing’s growth rate target is “fundamentally inadequate.”
What’s more concerning is that Beijing has been trying to boost the household economic sector for years, yet these efforts have always ended in failure. In fact, during this period, the proportion of the household economic sector in the economy has decreased.
The push for action began as early as 2007. Back then, the then-Premier Wen Jiabao shocked various levels of the Chinese Communist Party by declaring that the Chinese economy was “unbalanced” and economic growth was “unsustainable” unless China could develop a vibrant consumer sector.
A decade after Wen Jiabao’s remarks, household spending accounted for only 36% of the national GDP. Since Wen Jiabao raised this issue, other leaders have made similar efforts.
Current CCP leader Xi Jinping has repeatedly emphasized this need. In 2023, he pledged to help boost household consumer spending. At the CCP meetings in 2024 and 2025, as well as this spring, he reiterated this commitment.
However, despite these supports, the share of the household sector in the economy remains below 40%. In other words, China’s economy is increasingly reliant on investment (mainly from state-owned enterprises) and exports.
Even if central planners meet their more conservative 2030 goal, economic growth might still lag behind other economic factors. It is worth noting that consumer spending, like other economic factors, has fallen below expectations. As of May this year (the most recent available statistical data), China’s retail sales were 0.6% lower than the expected level in May 2025.
Based on this and the plan itself, China seems destined to rely on exports, while at a time when the hostility towards Chinese trade from the United States, the European Union, other Asian regions, and the so-called global south is escalating. This mirrors the imbalance and threat to sustainable growth mentioned by Wen Jiabao nearly 20 years ago, but the situation has worsened. For years, the Chinese Communist regime has been striving to boost household consumer spending, only to end in failure every time. It seems that this time will be no different.
*This article was translated and rewritten by a news reporter.