Facing a downturn in the Chinese economy and weak consumer demand, the Chinese Communist Party’s magazine “Qiushi” recently published an article titled “Boosting Consumption with Greater Efforts,” emphasizing that “consumption is the ultimate demand and plays a fundamental role in economic development.” Scholars believe that the high-profile discussion on boosting consumption in “Qiushi” indicates that inadequate consumption has become an issue that the authorities cannot ignore.
On June 18, the article in “Qiushi” began by citing May’s consumption data, stating that the total retail sales of consumer goods had dropped by 0.6% year-on-year, with the cumulative growth rate from January to May falling to 1.4%. The article highlighted the decline in consumption data, indicating that top Chinese officials see insufficient domestic demand as an economic and political pressure point.
The article then proposed expanding employment opportunities, increasing disposable incomes, improving the social security system, and fostering new growth points in service consumption such as culture, tourism, health, elderly care, and childcare. It also stressed the need to “stabilize the real estate market, promote the healthy and stable development of the capital market,” and prevent a decrease in asset prices from affecting consumer confidence.
Kang Jiancheng, the head of a manufacturing factory in Hangzhou, Zhejiang, expressed that many businesses are planning to downsize or even cease production due to factors such as U.S. tariffs and tensions in the Hormuz Strait. He mentioned the challenges faced by the manufacturing industry in Zhejiang, with many closures and layoffs leading to decreased consumer spending.
Kang noted the impact on migrant workers in Hangzhou, where traditional physical stores struggle to compete with the rise of online platforms in the service industry. He highlighted the shift in consumer behavior, with people now saving money by wearing clothes for longer periods and spending less on non-essential items.
Data released by the National Bureau of Statistics of China on June 16 also indicated a weakening trend in May’s consumption figures. Retail sales in China recorded a decrease for the first time since December 2022, while fixed asset investment and real estate investment continued to decline, reflecting persistent weak domestic demand.
An informant from the Jiangsu Small and Medium Enterprise Association revealed that private enterprises are increasingly concerned about the shrinking space for survival. She pointed out that while official policies urge companies to transition, many small and medium enterprises lack the resources and technology required for such transformations.
The informant highlighted the shift in government support towards high-tech industries like semiconductors, artificial intelligence, and robotics, leaving traditional manufacturing struggling to meet compliance standards and invest in upgrades. This financial constraint poses a significant challenge for most small and medium enterprises, pushing them towards digitization and green, low-carbon transformations to survive in the evolving market landscape.
At the end of 2025, the Central Economic Work Conference of the Chinese Communist Party identified “vigorously boosting consumption, enhancing investment efficiency, and comprehensively expanding domestic demand” as a key task. Although various regions have implemented measures such as consumer vouchers, trade-in programs, and tourism promotions, consumer expectations have not recovered, with household expenses overshadowed by mortgage payments, education, and healthcare costs.
A scholar with expertise in the Chinese economy, Mr. Sun, emphasized that addressing insufficient consumption requires more than short-term promotional strategies. He argued that the authorities recognize the severity of the consumption shortfall’s impact on the economy, with the article in “Qiushi” elevating “boosting consumption” to a political imperative. As uncertainty permeates society, investments dwindle, young people delay marriage and child-rearing decisions, and consumers withhold spending due to economic uncertainties, ultimately exacerbating the existing economic challenges.
The article in “Qiushi” highlighted the need to restore households’ balance sheets, stabilize the real estate and capital markets. A resident of Jinan, Shandong, Mrs. Zhao, expressed how declining property values, stock market fluctuations, and diminishing assets have eroded consumer confidence among ordinary families, limiting their spending choices to basic necessities.
She shared anecdotes of people in her circle modifying their spending habits by postponing non-essential purchases, given the current unpredictability in job security and financial stability. The apprehension surrounding potential layoffs and economic uncertainties has instilled a cautious approach towards spending among many families, emphasizing the importance of financial security over discretionary spending.
While the Chinese Communist Party vocalizes the need to stimulate consumption, business owners and residents remain unsatisfied, highlighting the disparity between policy goals and real-world challenges. Interviews with stakeholders revealed that businesses are concerned about order volumes and compliance issues, while residents worry about income stability, mortgages, and job security. The revival of consumer spending hinges not on rhetoric but on the financial capacity of individuals and the resilience of businesses to persevere amid economic uncertainties.