China Unveils Consumption ‘Action Plan’
China announced a “special action plan” on Sunday, aimed at stimulating consumer spending by increasing resident incomes and expanding the social safety net.
The long-awaited initiative, which comes as policymakers navigate an increasingly uncertain global economic landscape, includes 30 measures covering everything from income growth, paid leave, and international tourism to childcare subsidies and coupons for big-ticket purchases.
Unveiled days after the conclusion of China’s annual “Two Sessions” legislative meetings, the consumption plan is part of an effort to achieve the country’s gross domestic product growth target of around 5% — unchanged from the previous two years.
According to the National Bureau of Statistics, total retail sales of consumer goods grew by 3.5% in 2024, down from 7.2% in 2023. Local governments across China have previously announced multiple rounds of consumption support policies, including coupons for big-ticket items or rebates for upgrading household appliances.
The new policy calls for a more broad-based approach, attempting to address longstanding “pain points” such as out-of-control overtime, high childcare costs, and the real estate slump, though implementation will largely be left to local governments.
Here’s what you need to know.
Boosting incomes
The action plan calls on local authorities to “promote reasonable income growth,” particularly in key sectors and industries. This will be done by improving training systems and classifications for specialized occupations, as well as raising the minimum wage.
China’s per capita disposable income broke the 40,000-yuan ($5,600) barrier in 2024, but significant gaps remain between the wealthy coast and less-developed interior, as well as between urban and rural areas.
In addition to boosting worker income, policymakers are calling for new policies to increase farmer income and diversify rural economies through tourism and forestry.
Stocks — a key government focus over the past six months — also received attention, as the plan calls for “broadening wealth and income channels” and “taking multiple steps to stabilize the stock market.”
Paid leave
In addition to income support measures, the action plan also emphasized the need to strengthen labor protections, especially regarding paid leave and overtime.
At a press conference Monday, Li Chunlin, deputy director of the National Development and Reform Commission, highlighted longstanding “pain points,” such as the rise of China’s “996” overtime culture, that must be addressed before residents start spending again.
The plan links the protection of weekends and vacation time to consumption, calling for employers to promote off-peak travel using paid leave. Local governments are also encouraged to introduce spring and autumn breaks for primary and secondary schools, where conditions permit.
Multiple major firms, including drone manufacturer DJI and consumer appliance giant Haier, have announced mandatory clock-out policies in recent weeks.
Tourism
The action plan includes multiple measures meant to boost tourism consumption, particularly in emerging industries like winter sports — a sector China has dubbed the “ice and snow economy.”
Policymakers also plan to lure more major shows and events to China by streamlining the approval processes for commercial performances, sports events, and large-scale public activities.
After a lengthy absence from the international tour circuit, China has hosted concerts by a number of well-known musicians over the past year, from Ye to Ed Sheeran.
The government also wants to attract more international tourists, in part by expanding the list of visa-free countries, supporting duty-free stores, and improving the shopping experience for international consumers.
Childcare subsidies
Another of the action plan’s topline items involves increasing childrearing and childcare subsidies.
Last week, Hohhot, the capital of the Inner Mongolia Autonomous Region, made headlines for announcing payouts as high as 100,000 yuan per child. Other cities, including the eastern tech hub of Hangzhou, have also rolled out subsidies for having more children.
As with much of the rest of the plan, the details of the subsidies are still being ironed out. Speaking at the Two Sessions, Lei Haichao, director of China’s National Health Commission, announced plans for draft childcare subsidy measures, but did not specify a timeline.
In addition to direct payouts, the action plan calls for the promotion of flexible working arrangements and increased access to health insurance for migrants and gig workers.
Consumption
Perhaps the biggest push was reserved for domestic consumption. The action plan includes provisions aimed at boosting large-scale consumption in sectors such as housing, automobiles, and electronics.
To start, policymakers plan to expand already existing trade-in programs for durable goods including automobiles, home appliances, home furnishings, and digital products.
For the automobile sector, the policy seeks to encourage the growth of a secondhand market as well as aftermarket services including vehicle modifications, leasing, motorsports, and RV camping.
In the real estate sector, the plan calls for reducing interest rates for certain classes of loans and expanding residents’ access to the housing provident fund.
Wu Jing, director of Tsinghua University’s Research Center for Real Estate Finance, told domestic media that this is the first time a State Council-issued document on boosting consumption has specifically addressed housing policies.
Average property prices fell again in February, though prices for new homes in the country’s largest cities rose slightly.
(Header image: Visitors take a closer look at an EV at a local shopping festival in Huai’an, Jiangsu province, March 16, 2025. VCG)
