Despite complex external conditions, China has prioritized expanding domestic demand and strengthening its internal economic cycle in 2025. Consumption recovery policies have shown steady results, with structural upgrades gaining momentum. According to National Bureau of Statistics data, GDP grew 5.2% year-on-year in the first three quarters, with final consumption expenditure contributing 53.5% to economic growth—a 9-percentage-point increase from 2024. The Central Economic Work Conference emphasized "sustained domestic demand expansion and supply optimization" as key tasks for building a robust domestic market.
Consumption momentum continues to strengthen. From January to November 2025, total retail sales rose 4% year-on-year, surpassing 2024's full-year growth of 3.5%. Service consumption grew 5.4%, accelerating by 0.1 percentage points. Trade-in policies for automobiles, appliances, electronics, and home furnishings drove over 2.5 trillion yuan in sales, benefiting 360 million consumers—including 11.2 million vehicle and 128.4 million appliance replacements.
Emerging consumption sectors showed vitality. Holiday travel during Labor Day and Dragon Boat Festival increased 6.4% and 5.7% respectively, while the 8-day National Day holiday saw 888 million domestic trips. China's box office surpassed 50 billion yuan with 1.19 billion admissions by mid-December. Short-form video drama users reached 696 million, with market size expected to exceed 2024's 50 billion yuan. Online retail sales of physical goods grew 5.7%, accounting for 25.9% of total retail. New energy vehicle sales surged 33.3%, achieving 50.2% market penetration.
Supply-side improvements boosted demand. Domestic brands gained traction, with 19.92 million new consumer products registered in the first three quarters, up 31.4% year-on-year. November CPI rose 0.7%, with core CPI up 1.2%. Inbound tourism rebounded after visa policy relaxations, with 15.89 million visa-free entries (+52.1%) among 51.3 million international arrivals (+27.8%) from January-August. Duty-free shops tripled to 10,000+, with tax-refund sales doubling.
Structural challenges persist. While per capita disposable income grew 5.2%, consumption expenditure rose only 4.7%, reflecting cautious spending. Service consumption growth slowed to 4.1%, potentially stagnating its share of total expenditure. Income-based consumption stratification continues, with supply-side imbalances between oversaturated low-end and insufficient premium offerings. Many SMEs struggle with rising costs and digital transformation needs.
Policy recommendations include: 1) Enhancing employment and income growth mechanisms to boost purchasing power 2) Optimizing trade-in policies and expanding service sector support (culture, elderly/childcare, household services) 3) Fostering innovation through R&D support, brand incubation, and international cultural exchanges 4) Establishing SME empowerment mechanisms combining financial aid, digital transformation, and industry funds 5) Improving long-term consumption systems through paid leave reforms, labor protections, and deregulation
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