Summary of Key Points
China's first national five-year plan for the consumer sector, the "15th Five-Year Plan for Expanding Consumption," has been officially released. The goal is to increase the total retail sales of consumer goods (in simple terms, the total amount people spend on purchases) to around 60 trillion yuan by 2030. The core strategy of the plan focuses on two main aspects: on one hand, continuing to strengthen cities as international consumption hubs to attract consumers from around the world; on the other hand, tapping into the consumer potential of county-level areas (towns and towns) to turn these markets into new growth drivers. This is achieved through policy initiatives and brand development, creating a sustainable mechanism that can stimulate consumption across all levels of society, from large cities to small towns.
International Consumption Hubs: Rising as Global Shopping Destinations
Currently, Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing are the leading international consumption centers. These cities have become the primary destinations for foreign consumers in China. By 2025, these five cities will account for one-third of all foreign tourists entering the country, half of the imported consumer goods, and two-thirds of the tax refunds issued to foreigners.
How have they achieved this? It's through a series of convenient and distinctive policies. For example, Beijing has implemented a city-wide tax refund system, allowing foreigners to get refunds anywhere in the city without having to visit specific stores, with the process completed in just two minutes via a smart platform. Shanghai has over 2,100 tax refund outlets, including those located at large events such as the China International Import Expo and Formula 1 races. These cities also promote the "first-release economy," hosting product launches and limited-edition events that attract global consumers.
In the future, further efforts will be made to enhance their status. For instance, Hainan is being developed into an international tourism and consumption hub, and there will be greater coordination between city clusters to avoid competitive homogenization.
County-Level Consumption: The New Engine for Expanding Consumption
Previously, consumption was mainly concentrated in large cities, but the potential of county-level areas is now becoming increasingly significant. Data shows that the growth rate of rural consumer sales in the first half of this year was 1.3 percentage points higher than that of urban areas, and the proportion of consumption from these regions has approached 40%.
Why is this happening? On one hand, the county economy has strengthened, with 15 new counties (with GDPs exceeding 100 billion yuan) added last year, bringing the total to over 75, including several with GDPs exceeding 200 billion yuan, such as Kunshan and Jiangyin. On the other hand, the purchasing power of residents in these areas has increased; by 2025, the per capita consumption expenditure in at least 13 counties is expected to exceed 53,000 yuan, higher than that in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen (for example, Yueqing and Yiwu).
Companies have also recognized this opportunity. Sam's Club has opened stores in several of these counties, and international hotels like Hilton and Marriott are expanding their presence there due to the growing demand for high-quality accommodations. The plan includes initiatives to upgrade local shopping centers and markets, facilitating trade between urban and rural areas.
Policy Measures to Make Consumption More Convenient and Attractive
The 28 measures outlined in the plan aim to address various barriers to consumption:
- Facilitating Access for Foreigners: Policies such as visa-free entry for short visits are being implemented to make it easier for foreigners to travel and shop in China (for example, there are many foreign tourists near the Guangzhou Tower, where they can purchase goods).
- Improving Tax Refunds: The tax refund system, already in place in Beijing and Shanghai, is being extended to 17 other provinces and cities to make the process faster and more convenient.
- Promoting the First-Rlease Economy: Support for city-based events that showcase new products, attracting global brands to launch their latest offerings in China.
- Enhancing Urban-Rural Connectivity: Improving logistics to enable counties to access urban brands and vice versa, supporting farmers by helping them sell their agricultural products.
A Multi-Level Consumption System
The plan aims to create a pyramid-shaped consumption structure:
- Top of the Pyramid: International consumption hubs that attract global demand and set trends (e.g., Shanghai's import goods, Beijing's premium services).
- Middle of the Pyramid: Key city clusters and metropolitan areas that collaborate in various sectors (e.g., Suzhou focusing on manufacturing, Hangzhou on digital consumption).
- Base of the Pyramid: County-level areas and rural markets, which are upgraded through commercial development and brand expansion to unleash local consumer potential.
This approach ensures that everyone, from international visitors to local residents, can find suitable consumption options, ranging from luxury goods to everyday necessities, ultimately contributing to sustained economic growth.
In summary, this plan seeks to transform China from a major manufacturing nation into a leading consumer market. By leveraging the strengths of large cities and tapping into the potential of rural areas, along with supportive policies and brand strategies, the goal is to make consumption a driving force for economic development.