China on Tuesday announced a series of measures intended to strengthen household consumption from 2026 to 2030, with a particular emphasis on expanding the services sector.
The National Development and Reform Commission (NDRC) outlined upcoming initiatives aimed at counterbalancing persistent supply and demand disparities, following last year’s economic growth of 5%—a rate achieved largely through robust exports rather than domestic spending.
The NDRC emphasized efforts to substantially increase the proportion of household consumption within the economy over the next five years, although it did not disclose specific targets.
Recent data highlight the ongoing supply-demand gap: in 2025, industrial production grew by 5.9%, notably ahead of the 3.7% increase in retail sales. Officials described tepid domestic demand as a significant challenge facing the economy.
To address these concerns, China’s finance ministry will extend interest subsidies for individual consumers, service-related businesses, and companies upgrading equipment through the end of 2026. The goal, according to the ministry, is to lower consumer credit costs and stimulate broader household spending.
Additional support will include two-year interest subsidies for micro, small, and medium private enterprises, alongside a 500 billion yuan ($71.83 billion) loan guarantee program for private investment.
Specific efforts to encourage spending will build on existing trade-in subsidy schemes for products such as electric vehicles, though policymakers noted that future attention will increasingly shift toward service industries. Sectors like healthcare, elderly care, and leisure are expected to provide significant growth opportunities, government officials said.
In a parallel move, China’s one-year and five-year loan prime rates (LPR) were held at 3.0% and 3.5%, respectively. The decision met market expectations, with the one-year rate serving as benchmarks for the majority of renminbi lending and the five-year rate being relative to mortgage pricing nationwide.
