Consumers do shopping to prepare for the Spring Festival at a supermarket in Xuchang, Henan Province, on Jan. 21, 2025. Photo: IC PHOTO

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The annual Central Economic Work Conference in late 2024 elevated the emphasis on domestic demand by calling for “expanding domestic demand on all fronts,” an upgrade from the previously stressed “focusing on expanding domestic demand.” This shift highlights the growing prominence of domestic demand expansion, identified as the top economic task for 2025.

Consumption and investment form the backbone of domestic demand. With its vast population of 1.4 billion, including a middle-income group exceeding 400 million, China is believed to possess the largest and most promising consumer market in the world, underpinned by enormous investment potential. 

Consumption 

According to the latest data released by the National Bureau of Statistics (NBS) on Jan. 17, 2025, total retail sales of consumer goods reached approximately 48.79 trillion yuan in 2024, marking a 3.5% year-on-year increase. Final consumption expenditure contributed 2.2 percentage points to economic growth, maintaining consumption’s status as the primary driver of development. 

The conference called for promoting large-scale equipment upgrades and consumer goods trade-in programs with greater intensity and scope. In 2024, related policies delivered gradual results. By December 2024, over 5 million vehicles had been replaced through the automobile trade-in program, while sales revenue for home audiovisual equipment and household appliances rose by 15.9% and 18.7%, respectively.

Furthermore, the conference emphasized the importance of innovating and diversifying consumption scenarios, expanding service consumption, and developing cultural tourism. It also called for active efforts to develop emerging sectors such as the debut economy, ice and snow economy, and silver economy.

On Jan. 5, 2025, the 41st Harbin International Ice and Snow Festival kicked off in Harbin City, northeast China’s Heilongjiang Province, bringing renewed energy to the Harbin Ice-Snow World, the city’s premier tourist attraction. Since the attraction opened on Dec. 21, 2024, the city has recorded a 21.3% year-on-year increase in tourist numbers. In 2024, Harbin welcomed 179 million visitors, with total tourism spending reaching 231.42 billion yuan—both metrics saw year-on-year growth exceeding 30%.

Elsewhere, the nation’s capital Beijing has intensified efforts to attract high-quality brands as part of its focus on developing the debut economy. In Kunming, southwest China’s Yunnan Province, supporting facilities for sojourn elderly care have been continually improved, offering one-stop services for healthy retirement. Meanwhile, Sanya in south China’s Hainan Province has scheduled large-scale performances and sports events for the Spring Festival, opening new pathways for the growth of the cultural tourism sector.

Currently, weak consumption capacity and willingness among residents continue to limit the full release of domestic market potential. Increasing employment and raising incomes are fundamental to boosting consumer spending power. To this end, the Central Economic Work Conference emphasized policies aimed at increasing incomes and reducing burdens on low- and middle-income groups to enhance their capacity, willingness, and level of consumption.

In 2024, China implemented over 2,700 work-relief programs, creating 3.32 million job opportunities for rural residents. Additionally, two rounds of central government funding for 2025 work-relief initiatives, amounting to 9.05 billion yuan, have already been allocated to support more than 2,000 local projects nationwide. 

Investment 

As one of the three pillars of economic growth, investment plays a pivotal role in expanding domestic demand and driving development. 

According to NBS data, China’s fixed asset investment (excluding rural households) reached approximately 51.44 trillion yuan in 2024, reflecting a year-on-year growth of 3.2%, driven by a 4.4% increase in infrastructure investment and a robust 9.2% rise in manufacturing investment.

To enhance investment efficiency, the conference clarified the plan to increase the issuance of ultra-long special treasury bonds and continue to support projects for implementing major national strategies and building security capacity in key areas, while calling for better top-down organization and coordination in these endeavors. 

In 2024, supporting projects for the implementation of major national strategies and building security capacity in key areas served as a vital lever for expanding domestic demand. A total of 1,456 major projects supported by approximately 700 billion yuan raised through ultra-long special treasury bonds commenced construction, including projects to improve the railway network along the Yangtze River, the sixth phase of ecological projects involving the northwestern, northern, and northeastern regions of China, and projects to expedite the cultivation of high-standard farmland in major grain-producing areas in northeast China. Meanwhile, progress also accelerated on several major landmark projects spanning regions and river basins. 

As 2025 begins, domestic demand is set to gain momentum under the scientific guidance of the CPC Central Committee and the collective efforts of all sectors. This renewed vitality is expected to provide sustained impetus for high-quality economic development in China.

Edited by CHEN MIRONG