Following 2025, this year's Government Work Report has once again placed expanding domestic demand at the top of the work tasks, particularly highlighting the "implementation of special actions to boost consumption" and proposing multiple detailed measures. In summary, these can be understood as enabling consumers to achieve the "Three Haves": having money to spend, having time to spend, and having space to spend. Regarding this, a reporter interviewed Yao Yao, Head of Research for Jones Lang LaSalle (JLL) China, for a detailed interpretation of this year's consumption policies.
The resident income increase plan can achieve "having money to spend." The 2026 Government Work Report for the first time proposed "formulating and implementing a plan to increase urban and rural residents' incomes," preparing to introduce practical measures in areas such as promoting income growth for low-income groups and increasing residents' property income. In Yao Yao's view, the biggest challenge in achieving a virtuous cycle of "income increase – consumption – growth" in 2026 lies in the core of "income increase." This requires a package of systematic policies to work in synergy, including not only promoting income growth for low-income groups but also multi-dimensional measures such as improving childcare subsidies, strengthening educational support, and健全医疗保障. At the same time, effectively converting "income increase" into "consumption" also requires simultaneously boosting residents' consumption confidence and releasing the consumption potential suppressed by precautionary savings.
Regarding the real estate market, Yao Yao believes that the stabilization of this sector has a significant impact on the wealth effect and consumption confidence of residents. Promoting a halt to the decline in housing prices and stabilizing them, along with reducing inventory through multiple channels, helps stabilize the value of household housing assets. This, in turn, can activate rigid and improvement housing demand and drive consumption chains upstream and downstream, such as decoration, home appliances, and home furnishings. Meanwhile, the stable and healthy operation of the capital market can, to a certain extent, effectively increase residents' property income, further enhancing consumption capacity and willingness, forming a positive interaction between the real economy and the capital market.
The 2026 Government Work Report proposed "establishing a new 100 billion yuan special fund for fiscal and financial coordination to boost domestic demand, utilizing methods such as loan interest subsidies and financing guarantees" and "expanding the scope of support for individual consumption loan interest subsidy policies." In Yao Yao's view, this model of fiscal and financial coordination can generate a significant multiplier effect in leveraging residents' major item consumption and investment by service industry business entities. Data from 2025 shows that major item consumption performance remains relatively weak. This 100 billion yuan special fund, through the combination of "interest subsidies + guarantees," can more effectively alleviate the pressure on residents in the area of major item consumption. For businesses, it can lower the financing thresholds and costs for service industry entities like small and micro enterprises, supporting expansion, store upgrades, and upgrades in sectors such as catering, culture and tourism, health and wellness, and retail. Compared to previous measures, this "interest subsidy + guarantee" model is more structural and sustainable. However, it is important to note that this policy can be seen as one part of a package of measures to stabilize growth and promote consumption. It plays a supportive role in boosting consumption growth and needs to work in conjunction with other measures to enhance the policy's multiplier effect.
Enabling residents to have more time and space for consumption. This year's Government Work Report mentioned "supporting qualified localities in promoting spring and autumn breaks for primary and secondary schools, and implementing a system of paid staggered leave for employees." The key focus is on employee leave, aiming to combine leave with cultural and tourism consumption by releasing employees' "leisure" time, thereby activating the tourism market. From the perspective of urban consumption, how will the optimization of the holiday system reshape consumption periods, scenarios, and regional distribution? Yao Yao stated that it is foreseeable that paid staggered leave for employees will shift consumption from a "concentrated boom during Golden Week" towards a "more balanced distribution throughout the year." In terms of timing, passenger flow and consumption activity on weekdays and during traditional off-peak seasons are expected to increase significantly. In terms of scenarios, fragmented, high-frequency, high-repeat consumption formats such as short-haul micro-getaways, cultural experiences, city walks, and parent-child study tours will accelerate their rise. In terms of regional distribution, cities with cultural characteristics or ecological resources that are not traditionally hot tourist spots, as well as suburban destinations benefiting from the popularity of micro-getaways, will gain more traffic dividends. For shopping malls and cultural tourism projects, this means operational strategies need to shift from "holiday marketing-driven" to "balanced year-round operations." On one hand, they need to strengthen daily social and experiential functions, creating a "third space" attribute to attract families traveling during off-peak times. On the other hand, they should develop combinable cultural tourism products, such as half-day cultural workshops, weekend light camping, and seasonal theme markets, to suit flexible travel needs.
The report proposes "optimizing the consumption environment for inbound tourists and building the 'Shop in China' brand." What new requirements does the upgrade in inbound consumption structure place on domestic commercial scenes? In which aspects do Chinese cities and commercial carriers still need to align with "international standards"? Which cities or business districts are most likely to be the first to form clusters for inbound consumption? Yao Yao noted that inbound consumption is accelerating its upgrade from the traditional "tax-free shopping" model towards comprehensive demands for "experience + quality," placing higher requirements on domestic commercial scenes. Firstly, payment convenience has become a basic threshold; better support for international credit cards and mainstream digital wallets is needed in the future to eliminate transaction barriers. Secondly, multi-language guided tours, customer service, and signage are required. Thirdly, culturally adapted product combinations, such as collaborations between domestic trendy elements and international IPs, can enhance consumption resonance. Fourthly, commercial spaces should deeply integrate local culture, for example, by embedding intangible cultural heritage and other Chinese characteristic content to create differentiated experiences. To achieve this transformation, Chinese cities need to accelerate alignment with international standards in areas like payment systems and standardized international facilities, while fully leveraging the characteristics and advantages of local culture. Currently, core business districts in first and second-tier cities already possess a high density of international brands, mature passenger flow bases, and cultural tourism resources. They are most likely to be the first to build globally attractive inbound consumption ecosystems and become the core carriers of the "Shop in China" strategy. Some third-tier cities, especially international tourism hotspots, have the potential to become emerging concentration areas for inbound consumption by leveraging their unique cultural resources, tourism appeal, and internationalized infrastructure.
Looking ahead, what institutional or supply-side bottlenecks need to be broken through for service consumption to achieve further development? Yao Yao stated that currently, China's household final consumption expenditure accounts for about 40% of GDP. It is expected that this proportion will steadily increase during the "15th Five-Year Plan" period. Among this, the growth rate of service consumption will accelerate and is expected to become one of the core engines driving consumption growth. Of course, at the institutional level, key areas such as healthcare, education, and elderly care still face high barriers to entry and licensing restrictions, which limit the orderly entry and efficient allocation of social capital and hinder the rapid expansion of high-quality supply. On the supply side, there is a relative shortage of high-quality, trustworthy service resources, and their distribution is uneven between urban and rural areas and across regions. These structural shortcomings limit the release of service consumption potential.
This year's Government Work Report mentioned "cleaning up unreasonable restrictive measures in the consumption sector, releasing consumption potential in areas such as culture and tourism, sports events, and health and wellness." In Yao Yao's view, what are the main current "unreasonable restrictions"? The relaxation in which areas is most anticipated? Yao Yao believes that the main current restrictions include lengthy performance approval processes, high barriers for the landing of commercial sports events, restrictions on foreign shareholding ratios in some scenic spots, complex cross-departmental approvals for integrated medical and elderly care projects, and insufficient coverage of cross-provincial medical insurance settlement. In his opinion, the most anticipated relaxations are easing market access for international companies in the culture, tourism, and health and wellness sectors, as well as simplifying the filing procedures for large-scale events to unleash market vitality.
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