Chinese President Xi Jinping has emphasised the need for domestic consumption to become the main driver of growth, signalling a significant shift in strategy as global trade uncertainties mount. His remarks, made at the Central Economic Work Conference, highlight a growing concern over reliance on exports.
Xi called for a coordinated effort to stimulate spending and increase investment within China, leveraging the advantages of the country’s vast market. Improving household incomes and stabilising investments are now central goals for policymakers. This focus comes in response to a record trade surplus last year, despite ongoing tariff disputes with the United States. However, rising protectionism and backlash from trading partners highlight the necessity of shifting towards a consumption-based growth model.
Last year, China’s economy saw growth of 5%, primarily driven by exports, which masked weaker domestic consumption and a severe decline in investments, especially in the property sector. Officials recognise that relying heavily on exports is becoming less viable due to increasing geopolitical risks.
Xi reiterated the importance of innovation in China’s development plans, promising to foster new growth industries and improve household incomes through increased wages and pensions. Investment projects that directly benefit public welfare are also set to receive more focus.
In addition to these measures, the government aims for high-quality development, greener initiatives, and structural adjustments. While supportive policies are expected to continue, Beijing is not preparing for a large-scale stimulus, opting instead for a controlled approach to maintain economic stability through 2026.
