Officials want stronger consumption, but without stronger policy support

The Party wants households to spend more over the next five years, but the leadership won’t change its approach to supporting consumption.

• That’s what we took from the Fourth Plenum’s "proposals" for the 15th Five-Year Plan (2026-2030), released on October 28 – which serve as the blueprint for the full plan due out in March.

In addition, the proposals didn’t provide a concrete economic growth target, instead saying that over the next five years, the goal is for:

• “Economic growth to remain within a reasonable range”
• “Total factor productivity to steadily increase”
• “The per capita consumption rate to significantly increase”
• “Domestic demand to strengthen as the primary driver of growth”

The proposals also gave consumption significant airtime, saying:

• “The proportion of public service expenditure within fiscal expenditure should be reasonably increased”
• “Special actions to boost consumption should be deepened”
• “The intensity of preferential policies directly reaching consumers should be increased”

Between the lines: The first point is straightforward..

• The second and third likely refer to ongoing initiatives like the consumer goods trade-in scheme and subsidized consumer loan program.

Our take: The Party wants to boost domestic demand and sees heightened consumer spending as an important part of that.

• But it’s not preparing to unleash a debt-backed welfare expansion to make that happen.

Get smarter: Beijing’s bet is on raising household incomes through productivity-led growth – that will be a slow burn.

• In the meantime, it will lean on ad hoc programs and modest increases in welfare spending to keep consumption ticking over.