In this new phase of "breaking boundaries and reshaping," what is the new logic behind China's economy's dual internal and external "circulation"? Currently, the Chinese economy stands at the intersection of laying out the 15th Five-Year Plan and the profound reshaping of the global landscape. Looking inward, ultra-long-term special treasury bonds and the "trade-in" policy have effectively leveraged domestic demand, yet phenomena such as shifts in consumption momentum and structural differentiation in consumption warrant attention. Looking outward, the wave of Chinese enterprises advancing from "selling globally" to "establishing globally" is irreversible, but they still face challenges such as insufficient brand premium, localization capability building, and adaptation to geopolitical rules. In this new phase of "breaking boundaries and reshaping," what is the new logic behind China's economy's dual internal and external "circulation"? Last week, at a scholar salon at Peking University's Guanghua School of Management, several young professors engaged in an in-depth discussion on this topic.
The Differentiation and Evolution of "Trade-in": Efficiency, Equity, and Future Transformation Since 2023, China's household consumption rate has been 37.2%, lower than the global average of 53.8%; the savings rate reached 43.4%. Against this backdrop, how to unleash household consumption potential and improve the consumption structure has become a key focus of policy design. Concurrently, the growth rate of durable goods consumption such as home appliances, automobiles, and furniture has slowed. In 2023, the home appliance industry grew by 3.5%, making the renewal of durable goods an important entry point for consumption-stimulating policies. Therefore, starting in 2024, the Chinese government's large-scale promotion of the consumer goods "trade-in" policy through ultra-long-term special treasury bonds has become one of the most representative fiscal tools in recent years.
How has China's "trade-in" policy evolved over the past three years? Luo Mi, assistant professor in the Department of Applied Economics at Peking University's Guanghua School of Management, pointed out that in 2024, 150 billion yuan was invested in the consumer goods "trade-in" policy, covering subsidies for 8 categories of home appliances, with a 15% subsidy for second-level energy efficiency and 20% for first-level, capped at 2,000 yuan. In 2025, the funding scale doubled to 300 billion yuan, expanding home appliance categories to 12, and for the first time including 3C products like mobile phones, with a 15% subsidy ratio capped at 500 yuan. In 2026, the funding scale was adjusted to 250 billion yuan, with an additional 100 billion yuan special fund for fiscal-financial coordination. The home appliance subsidy scope was reduced to 6 categories, subsidizing only first-level energy efficiency, while smart glasses were added to 3C products. As of early May 2026, the policy has benefited over 86 million people, driving nearly 630 billion yuan in sales.
"Although the policy itself shows no bias, there are certain differences in policy response among different platforms. From the results, self-operated models and platforms more aligned with local social retail statistical rules have an advantage," Luo Mi stated.
Offline channels have also shown differentiation. Leading retailers like Suning.Com Co.,Ltd. and Red Star Macalline have gained more benefits due to their financial strength; however, small and medium-sized dealers have been marginalized due to high upfront capital pressure, untimely rebates, and cumbersome offline procedures. A "Matthew effect" has also emerged at the brand end, where premium brands' post-subsidy prices approach those of mid-range brands, leading consumers to "trade up."
From the consumer perspective, in 2025, a total of 360 million people in China applied for national subsidies, driving 2.6 trillion yuan in sales. Among these, mobile phones accounted for a high 70%, and home appliances for 54%. In terms of price distribution, mid-to-high-priced goods between 2,001 and 6,000 yuan collectively accounted for over 80% of the share. This means the national subsidies are not simply driving low-price consumption but are stimulating renewal demand for mid-to-high-priced goods.
However, there is still room for optimization in the policy's coverage equity. Luo Mi pointed out that rural and low-income groups may face issues such as unverifiable old appliances, insufficient offline service points, and the digital divide during participation, resulting in relatively lower engagement. The distribution of policy dividends among populations, regions, and channels needs further improvement.
As the policy continues, demand for durable goods consumption is also being released ahead of schedule. Calculations by the Bank of China Research Institute show that the fiscal multiplier for home appliance categories in 2025 has dropped from a high level to 1.55, while the multiplier for communication equipment is still about twice that of home appliances. Luo Mi believes the next step may involve expanding service consumption. In the second half of 2025, the central government first proposed "cultivating service consumption as a new economic growth point." Compared to durable goods consumption, service consumption has stronger repurchase potential, weaker overdraft effects, and a higher proportion of labor compensation—approximately 52% in the service sector versus about 36% in manufacturing—making it more conducive to household income growth and consumption structure optimization.
In Luo Mi's view, the current "trade-in" policy still needs to address several relationships: the connection between short-term stimulus and long-term endogenous growth momentum, the smooth design of policy exit mechanisms, further optimization of coverage and equity, coordinated development of channel structures, and continuous improvement of user experience. "The future policy focus is shifting from 'leveraging consumption' to 'reshaping the consumption structure,' moving from durable goods to service consumption, and from total expansion to structural optimization. How to balance efficiency and equity, short-term stimulus and long-term transformation, will determine the direction of China's fiscal consumption policy for the next decade," Luo Mi said.
From "Selling Globally" to "Establishing Globally": Going Global Enters Deep Waters If "trade-in" observes the inward release of China's economic consumption potential, then brand globalization corresponds to Chinese enterprises reshaping their competitive methods outward.
"Without going global, you're out of the game." Wang Rui, associate professor in the Department of Marketing at Peking University's Guanghua School of Management, noted that this is no longer just a slogan but an increasingly strong consensus among Chinese manufacturing entrepreneurs in 2025. Based on thirty years of tracking data from the China Entrepreneur Survey System, she believes that the internationalization process of Chinese enterprises is undergoing a strategic leap from "selling globally" to "establishing globally." This is not only an upgrade in path but also a reconstruction of cognition and capability.
The globalization of Chinese enterprises did not happen overnight. Since 1978, it has roughly gone through five stages: a closed germination period dominated by "three supplies and one compensation," a preliminary exploration period after the "going global" strategy was proposed, a dividend explosion period after WTO accession, followed by a strategic expansion period, and a resilient integration period after 2019. "For a long time, going global was almost synonymous with 'selling goods,'" Wang Rui stated. Data from 2008 shows that over 90% of enterprises still relied on product exports as their main method, with direct investment and mergers and acquisitions accounting for a negligible share. With the advancement of the "Belt and Road" initiative and outward investment surpassing foreign investment, Chinese enterprises began pursuing value chain climbing, but brand awareness was still in an awakening stage.
The real turning point occurred after 2019. Sino-US trade friction, geopolitical changes, and intensifying domestic market competition turned brand globalization from a "nice-to-have" to a "matter of survival." Survey data from 2025 shows that 71.1% of enterprises have implemented a brand globalization strategy, with this proportion even higher among manufacturing enterprises, reaching 88.9%; only 12.7% of enterprises stated they "have no plans to implement internationalization." Meanwhile, the proportion of enterprises establishing overseas marketing institutions rose from 14.7% to 32.9%, and R&D institutions also doubled. More and more enterprises are no longer satisfied with OEM manufacturing but hope to establish independent brand recognition in the global market.
Why do enterprises choose to go global? Wang Rui explained that 54.6% of enterprises cite "avoiding internal competition" as the main motivation, while 42.4% state that profit margins are under pressure. For many enterprises, going global is becoming a path to break through from "price competition" to "brand competition." Especially for "specialized, sophisticated, distinctive, and innovative" enterprises, 57.8% choose to go global to escape low-price competition and reconstruct their profit models.
In terms of regional choice, Southeast Asia has become the main battlefield, with 55.4% of enterprises selecting it as their first choice, and 66.2% accelerating their layout due to tariff risks. However, moving from "selling globally" to "establishing globally" is not easy. Wang Rui stated that "selling globally" centers on product exports, relies on cost advantages and economies of scale, involves more one-way market relationships, and is more susceptible to tariff and exchange rate impacts. "Establishing globally" emphasizes value co-creation and niche building, relying on brand premium, technological innovation, and cultural identity, possessing stronger anti-cyclical resilience and pricing power.
To cross this threshold, Chinese enterprises first face cognitive challenges. For a long time, "Chinese goods" have been deeply associated with the "cheap" label in the perception of overseas consumers. Transforming this to "high quality, cutting-edge technology" requires sustained and long-term brand investment. "Therefore, enterprises must abandon the standardized mindset of 'one product for the whole world' and establish a 'global brand architecture + local product matrix,' truly understanding the cultural context of different markets," Wang Rui said.
More importantly, there needs to be a shift from short-term arbitrage to long-termism. Wang Rui believes that brand asset accumulation often takes five to ten years. Meanwhile, global consumers, especially Generation Z, increasingly value a brand's stance on issues such as climate change, social equity, and data ethics. A singular economic logic can no longer support long-term brand growth.
The capability threshold is equally high. Enterprises need to build distributed organizations with "global resources + local decision-making," enhancing global-localized operational capabilities. Cross-cultural brand storytelling is not just about translating slogans but involves allowing local cultural forces to participate in brand building. Supply chain management needs to shift from "efficiency first" to "resilience first." Enterprises also need to possess non-market strategic capabilities, learning to handle government relations, NGOs, and other non-market forces.
Wang Rui pointed out that while scale has rapidly increased, compared to world-class enterprises, Chinese enterprises still have room for improvement in areas such as governance transparency, accountability mechanisms, and cross-cultural leadership. These "soft powers" are precisely the key focal points for brand globalization.
Enterprises' expectations of policy are also changing. In the past, it was more about "seeking subsidies"; now, it is shifting to "seeking rules, information, and security." Fiscal and tax support, simplified approvals, compliance guidance, collective globalization, and diplomatic protection have become more concentrated demands among entrepreneurs. In the survey, 49.7% of entrepreneurs still believe the future will "get better and better." This cognitive resilience also constitutes the internal driving force for Chinese enterprises moving from "big" to "strong."
Wang Rui believes that brand globalization is not a sprint but a marathon requiring patience, wisdom, and collaboration. From "selling globally" to "establishing globally," Chinese enterprises are entering the deep waters of global brand operation. Only by breaking path dependency in cognition, building systems in capability, and truly taking root in strategy can Chinese brands possibly stand firm, stable, and long-lasting in the global market.
