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Tue, 10 Mar 2026

Tue, 10 Mar 2026 'Investing in people': Can China's new push to boost spending revive the economy?

Beijing has spent decades relying on exports and innovation but that model is now under strain.
Household consumption accounts for about 40% of China's GDP, lower than the global average, and recent data suggests that government stimulus can encourage spending, but confidence remains fragile. Analysts are skeptical about whether these social policies can significantly change consumer behavior, given the prolonged downturn in the property market and other economic challenges facing China. Some of the measures have also triggered skepticism online, with users questioning the motive for encouraging paid leave and debating issues such as marriage and parental leave. The challenges facing China's consumer economy run deep, including a weak property market, employment issues, and low birth rates. Analysts expect any shift toward consumption-led growth to be gradual, and most agree that it will take time for households to feel secure enough to spend and power the consumer economy. China is still doubling down on advanced manufacturing and technology in its upcoming 15-year development plan, aiming to embed artificial intelligence across the economy and strengthen industrial capabilities. The measures aim to encourage people to spend more and make up a significant part of the country's growth strategy. The goal of boosting household incomes and consumption has been set as one of the main tasks for the government, but it is yet to be seen if these policies can have a substantial impact on the economy. Some analysts believe that China needs to take a holistic approach to address its economic challenges, including improving education and skills training to boost employment opportunities, increasing social welfare support to alleviate poverty, and encouraging entrepreneurship to drive innovation.