Asia
China unveils ‘most comprehensive’ plan in 40 years to boost consumption
China has unveiled a new plan to stimulate domestic consumption, called the “Special Action Plan to Boost Consumption,” as it grapples with weak confidence and deflationary pressures.
The 30-point plan, issued by the General Office of the Central Committee of the Chinese Communist Party and the General Office of the State Council, aims to “strongly promote consumption, revitalize domestic demand as a whole, and enhance spending power by increasing earnings and reducing financial burdens.”
This plan supports President Xi Jinping’s directive from late last year, instructing policymakers to focus on boosting domestic demand.
Analysts have described China’s newly announced consumption action plan as the most comprehensive policy package the country has released in over four decades to boost consumer spending.
The plan from the State Council, China’s cabinet, will focus on increasing incomes, stabilizing real estate and stock markets, improving the consumption environment, and enhancing healthcare and pension services. Through this plan, the Chinese economy seeks to transition to a consumption-driven growth model.
News of the “Special Action Plan to Boost Consumption” invigorated stock markets on Monday.
The plan announcement, made late Sunday, followed the “Two Sessions” in Beijing last week, where legislators re-emphasized consumption as a top priority.
In China, domestic spending has remained weak since the end of Covid-19 lockdowns over two years ago, as households have been cautious about spending. Consumer prices fell into deflation in February, although figures were positively impacted by the New Year holiday.
The slowdown in China’s vast real estate sector has also renewed calls from economists to bolster domestic demand.
Data released by the National Bureau of Statistics on Monday showed that retail sales rose 4% year-on-year in January and February, surpassing December’s 3.7% increase and aligning with forecasts from a Reuters poll of analysts.
In September, policymakers announced a long-awaited package to support the economy, but the measures largely focused on stock markets, disappointing investors.
The new plan, comprising eight main sections, addresses factors such as income growth, enhancing the quality-of-service consumption, improving large-scale consumption, and improving the consumption environment simultaneously.
It includes a commitment to raising the minimum wage, strengthening support for education, and establishing a subsidy system for childcare—a particularly pressing issue as China’s population has declined for three consecutive years.
Shi Lei, an economics professor at Fudan University in Shanghai, said, “This is the most comprehensive directive to promote consumption since China’s reform and opening up [in the late 1970s],” adding, “According to the policy, authorities will promote the reasonable growth of employees’ incomes by increasing employment, raising the minimum wage, and accelerating the implementation of the paid annual leave system.”
Speaking to the South China Morning Post, Shi noted, “In the past, policymakers often ignored income growth [when discussing ways to boost spending].” He added, “In fact, if consumers have money, they don’t need your encouragement to spend, and if they don’t have money, such encouragement won’t work.”
Lynn Song, ING’s Greater China chief economist, stated that the plan “focuses significantly on boosting household consumption capacity and willingness” and, if implemented correctly, “could help China’s economic transition towards a consumption-driven growth model.”
“The direction looks positive, but implementation is everything. It is not certain that these measures will be enough to restore consumer confidence to healthy levels,” Song wrote, also noting that the administration’s focus on boosting consumption, combined with a relatively low base last year, means that China’s consumption growth could reach a mid-single-digit growth rate in 2025.
Data released on Monday also showed that industrial production increased by 5.9% year-on-year in the first two months of 2025, slowing from 6.2% in December but exceeding analysts’ expectations of a 5.3% increase.
The new package will also promote “inbound” consumption. Beijing has granted visa-free travel to dozens of countries in the past year to revitalize inbound tourism post-pandemic.
It also highlights specific tourism sectors such as “snow and ice.” China has built several indoor ski resorts in recent years, including the world’s largest, which opened in Shanghai in September.
According to the plan, China will also broaden real estate income channels with measures to stabilize the stock market and develop more bond products suitable for individual investors.
The plan calls for exploring ways to unlock the value of homes legally owned by farmers through rental arrangements, equity participation, and cooperative models.
Notably, in addition to traditional consumption sectors such as housing and automobiles, it emphasizes emerging categories such as AI-powered products and the low-altitude economy.
It also states that new consumption sectors with high growth rates will be created by accelerating the development and application of new technologies and products such as autonomous driving, smart wearable products, ultra-high-definition video, brain-computer interfaces, robotics, and additive manufacturing, more commonly known as 3D printing.
Xu Chenggang, a senior research fellow at the Stanford University Center on China’s Economy and Institutions, said that Beijing’s shift towards consumption indicates official recognition that the economic situation is “serious.”
Zou Yunhan, a researcher at the State Information Center, also said that consumption is playing an increasingly key role in boosting economic growth, but some challenges still persist in the quest to further unleash consumer potential.
Looking ahead, Zou called for joint efforts from all sectors to ensure the full implementation and effectiveness of the action plan.
Beijing said it had conducted law enforcement patrols in waters east of Taiwan in response to a decision by Japan and the Philippines to launch talks on maritime boundary delimitation.
According to a statement from the China Coast Guard, a flotilla led by the vessel Daishan carried out law enforcement patrols “in accordance with the law” on Monday.
China Coast Guard spokesperson Jiang Lue said the operation was “a necessary action” in response to Japan and the Philippines “unilaterally announcing the start of negotiations on maritime delimitation in waters east of China’s Taiwan Island.”
“Such an announcement seriously infringes upon China’s territorial sovereignty and its maritime rights and interests,” Jiang said.
“We urge Japan and the Philippines to immediately cease all illegal actions that violate China’s sovereignty and rights,” he added.
Jiang also said the coast guard would continue strengthening its control and management of the relevant waters and that China would take concrete measures to “resolutely safeguard territorial sovereignty and maritime rights and interests.”
The United States and most of its allies, including Japan and the Philippines, do not recognize Taiwan as an independent state and acknowledge it as part of China. The United Nations has also adopted resolutions reflecting this position. However, Washington continues to provide arms to Taiwan as part of its broader efforts to counter China and encourages its allies to do the same.
Following a summit in Tokyo between Japanese Prime Minister Sanae Takaichi and Philippine President Ferdinand Marcos Jr., the two countries said in a joint statement issued on Thursday that they had agreed to begin “formal negotiations” to delimit their exclusive economic zones (EEZs) and continental shelves.
Beijing condemned the planned talks as “completely illegal and invalid” and swiftly lodged formal diplomatic protests with both Tokyo and Manila.
Chinese Foreign Ministry spokesperson Mao Ning said on Friday: “The so-called delimitation negotiations are entirely illegal, invalid and void. They will have no impact whatsoever on China’s claims or on China’s exercise of its legitimate rights in the area east of Taiwan Island.”
The latest escalation comes at a time when relations between Beijing and both Tokyo and Manila are already strained. Japan and the Philippines are treaty allies of the United States, while China remains engaged in separate territorial disputes with Japan in the East China Sea and with the Philippines in the South China Sea.
As US attention and resources have increasingly shifted toward the war involving Iran, and as the White House has made the Western Hemisphere a strategic priority, Japan and the Philippines have stepped up diplomatic engagement in the region commonly referred to as the Indo-Pacific.
That effort has included building closer security and defence ties with other countries, prompting Beijing to accuse them of encouraging bloc confrontation in the region.
Japan and the Philippines do not share a maritime boundary. However, their seabed claims could overlap because both countries seek to extend their legal continental shelves beyond 200 nautical miles, equivalent to 370 kilometres or 230 miles.
The overlapping area lies east of Taiwan, southwest of Japan’s Ryukyu Islands and north of the Philippines’ Batanes Islands.
Yang Xiao, a researcher at the Chinese Academy of Social Sciences, China’s highest-ranking state-affiliated think tank, said Taiwan’s EEZ and continental shelf are part of the area under discussion.
“These are China’s rights and are not something that the two sides can negotiate among themselves,” Yang said.
In an interview published on Sunday by Yuyuan Tantian, a social media account affiliated with state broadcaster CCTV, before the China Coast Guard announced the patrols, Yang said Beijing would take “historic and unprecedented” countermeasures against Tokyo and Manila.
“Since they are negotiating in a three-party overlapping zone, we can also take further steps to advance our jurisdiction in the waters east of Taiwan,” Yang said.
“If the other side insists on reckless and destructive actions, we will inevitably introduce new countermeasures.”
Yang described the waters east of Taiwan as a vital maritime area for the island’s economic activities.
“If these waters are divided between Japan and the Philippines, that would clearly harm the interests of the people living on Taiwan Island,” he added.
As artificial intelligence reshapes industrial structures in Japan and South Korea, stock market rankings are being redrawn. SoftBank Group has overtaken Toyota Motor to become Japan’s most valuable listed company.
SoftBank shares have surged as the global artificial intelligence rally gathers momentum, lifting the technology conglomerate’s market capitalisation above that of Toyota for the first time in more than two decades.
The shift reflects a broader reordering of Japan’s equity market. Automakers, alongside banks, steelmakers, energy companies and other traditional heavy industries, are losing ground to chipmakers and companies linked to artificial intelligence.
SoftBank shares jumped 14% on Monday, reaching a new record high. The company’s market value climbed to 48 trillion yen, or $301 billion, making it the most valuable company listed on the Tokyo Stock Exchange.
Toyota had long held the top position, with a market capitalisation of approximately 45 trillion yen. The last time SoftBank surpassed Toyota was in March 2000, at the peak of the dot-com bubble.
SoftBank’s rapid rise has been driven by strong earnings performance and its substantial investment in ChatGPT developer OpenAI.
The Japanese company reported net profit of 1.82 trillion yen, or $11.4 billion, for the first three months of 2026, 3.5 times higher than in the same period a year earlier. The group is also increasing its investment in OpenAI, completing a $10 billion investment in April and committing to invest an additional $20 billion later this year. Total investment is expected to reach roughly $65 billion.
According to The Wall Street Journal, OpenAI plans to file for an initial public offering and aims to list in the United States as early as September. Some media reports suggest the company could seek to raise $60 billion through the offering, potentially valuing it at more than $1 trillion. Such a transaction could become the largest initial public offering in history.
Investors expect the IPO to significantly boost SoftBank’s investment gains. Those expectations have helped drive the technology group’s share price higher. SoftBank shares have risen about 127% since early April.
The company is also planning to invest up to 14 trillion yen in the construction of data centres in France.
Chinese President Xi Jinping met Serbian President Aleksandar Vucic in Beijing, where the two leaders discussed bilateral ties and oversaw the signing of multiple cooperation agreements. Xi also awarded Vucic the Friendship Medal of the People’s Republic of China.
The meeting between Xi Jinping and Aleksandar Vucic began with an official welcoming ceremony at the Great Hall of the People in Beijing.
The two leaders then proceeded to formal talks. Xi said China and Serbia had achieved “positive results” since jointly launching the construction of a “China-Serbia community with a shared future in the new era” in 2024.
Xi said the partnership had not only benefited the two peoples but had also set an example for international relations.
The Chinese president described relations between China and Serbia as an “iron friendship” based on deep historical ties and mutual trust.
Calling on both sides to strengthen exchanges, deepen practical cooperation and continue supporting each other on issues concerning their core interests, Xi also said the two countries should align their development strategies and advance cooperation under the Belt and Road Initiative. In this context, he pointed to transport, energy and infrastructure projects.
Xi also called for expanding cooperation in emerging sectors such as artificial intelligence, the digital economy, green energy and advanced manufacturing.
Aleksandar Vucic congratulated China on the start of implementation of its 15th Five-Year Plan. Vucic also expressed confidence in China’s future development under Xi Jinping’s leadership.
The Serbian president said Belgrade attached great importance to relations with China and firmly supported Beijing on issues concerning China’s core interests.
Vucic thanked Chinese companies for their contributions to Serbia’s economic development and infrastructure construction.
Saying the two countries had made notable progress since establishing their comprehensive strategic partnership, Vucic added that cooperation had expanded across numerous sectors.
The Serbian president also praised China’s role in international affairs, saying Beijing approached smaller countries on the basis of equality and respect and defended international law.
Following the talks, the two leaders witnessed the signing of more than 20 cooperation agreements covering politics, trade, science and technology, education, legal affairs and culture.
The two sides also issued joint statements on steadily advancing the construction of a China-Serbia community with a shared future in the new era and jointly supporting the implementation of four global initiatives.
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