The Chinese government said it will foster 13 ultra-large consumer markets to break through prolonged weak domestic demand and imbalances in the supply and demand of consumer goods. By 2027, it plans to expand the silver industry, automobiles, and electronics to 1 trillion yuan (about 210 trillion won) each and to intensively nurture 10 sectors, including baby products, smart wearable devices, and cosmetics, to 100 billion yuan (about 21 trillion won) each.
According to a compilation of local media, including the state-run Xinhua News Agency, on the 28th, the China State Council held a policy briefing on the 27th and explained the "Implementation plan to strengthen alignment of demand and supply of consumer goods and promote consumption" (the plan), which was jointly released by six ministries, including the Ministry of Industry and Information Technology. This plan is the first policy document to promote consumption released since the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China.
Accordingly, the Chinese government plans to cultivate three "1 trillion yuan-level" consumer sectors and 10 "100 billion yuan-level" sectors by 2027. The 1 trillion yuan-level sectors are products for older adults, intelligent connected vehicles, and electronics. Among them, the market for products for older adults grew twofold in 10 years, from 2.6 trillion yuan (about 538 trillion won) in 2014 to 5.4 trillion yuan (about 1,117 trillion won) in 2024.
The 100 billion yuan-level sectors include baby products, smart wearable devices, cosmetics, fitness equipment, outdoor goods, pet food and supplies, civilian drones, character and figure "art toys," precious metals, and "guochao" ("patriotic consumption") fashion. According to the briefing, these 10 sectors are showing clear growth. In particular, the spread of health and fitness trends and increased character-related consumption are rapidly expanding the size of related markets.
China, the world's second-largest market, has recently faced a prolonged real estate slump, reduced investment, and job insecurity, making domestic demand recovery the top priority. Various economic indicators also cite unrevived domestic demand as the cause of China's economic slowdown. As goods consumption still accounts for a majority of total consumption, the Chinese government appears to be seeking to boost domestic demand by expanding goods consumption.
Behind the selection of 13 priority sectors is a "mismatch" between demand and supply. According to China Business News, China currently has about 230 million consumer goods items. About 100 categories, including home appliances, furniture, clothing, and sports-for-all equipment, rank first in the world in production volume.
However, the Chinese government says that although absolute production volumes are high, products that consumers truly want are not being adequately supplied. Xie Yuansheng, vice minister of the Ministry of Industry and Information Technology, said, "Overall supply is in surplus, but supply of premium brands is far from sufficient, and while a shift in growth drivers is underway, not enough distinctive, high-quality new products are coming out," adding, "Demand is rising rapidly for eldercare and childcare, culture and tourism, and smart consumption, while products for older adults, smart terminals, low-altitude tourism, and intellectual property (IP) derivatives are failing to keep up in both quantity and quality." The National Development and Reform Commission also said, "Consumers are focused on product quality," and added, "It is urgent to expand supply of high-quality products and diversify consumption scenarios."
The government said it will reorganize the market into a "structure that focuses on supplying the products consumers want" by fostering 13 consumer sectors. Vice Minister Xie said, "The consumer goods production side should respond proactively to changes in consumption trends and tailor precisely to diversified consumer demand from the product design stage," adding, "It is key for policy to indicate what people want and prefer, and for corporations to be guided to plan and produce products and services accordingly."