China aims to boost consumption by tackling rogue traders

Beijing plans to encourage domestic consumers to increase their spending by eliminating scams, price gouging and the sales of shoddy goods.

The Chinese government has published an action plan for boosting consumption that focuses on eliminating fraud and other issues that discourage consumers from spending, as it aims to shore up economic growth amid an intensifying trade war with the United States.

The 19-point plan, jointly issued by five government departments, aims to create “a healthier consumption environment” that will boost confidence and encourage consumers to spend more.

The authorities pledged to tackle issues ranging from unclear pricing and false advertising to low-quality products and inadequate consumer protection, with a goal of resolving the problems by 2027.

“Optimising the consumption environment is an important measure to boost consumer confidence and stimulate economic vitality, which is of great significance in promoting high-quality economic development,” the State Administration of Market Regulation said in a statement.

Key measures in the latest initiative include raising quality standards in industries such as automobiles, home appliances and food, while supporting the development of domestically made jewellery, leather goods and other consumer products.

The publishing of the 19-point plan coincides with the announcement from China’s legislators pledging to increasing household disposable income in an effort to boost consumption and shore up the country’s growth momentum.

At an executive meeting in February of the State Council — the country’s Cabinet — policymakers said stimulating consumption was to become the top priority amid efforts to sustain improvements in the domestic economy.

Consumption is poised to contribute 70%-80% to China’s economic growth this year, said Su Jian, director of the National Centre for Economic Research at Peking University, who added that achieving this level of consumption-driven growth will require the government to deploy a comprehensive policy toolkit — including consumer voucher programmes — to stimulate consumer demand.

“As incomes rise, demand for premium products and services is expected to grow,” said Yuan Haixia, executive dean of the Research Institute at CCXI. “By enhancing the quality and variety of products and services available, China can stimulate new consumer demand and unlock untapped market potential.”

China’s demographic trends, especially the aging population, are creating new consumption opportunities in healthcare, senior care, education and other service sectors, Yuan said.

The rapid development of cutting-edge technologies such as the metaverse and artificial intelligence is reshaping China’s consumption landscape, injecting fresh momentum into the economy, he added.

Tech sector benefits from tax breaks

China cut 2.63 trillion yuan ($361 billion) in taxes and fees targeted at technological innovation and high-end manufacturing last year, as the country strives for self-sufficiency in key technologies to maintain its competitive edge amid growing geopolitical and economic pressure.

Latest data from the State Taxation Administration, the country’s top tax authority, showed that tax breaks for companies’ research and development spending and technology transfers totalled 806.9 billion yuan in 2024.

Tax incentives for high-tech enterprises and emerging industries — including a 15% corporate income tax rate and exemptions on new energy vehicle purchases — added up to 466.2 billion yuan last year.

To tackle bottlenecks in core technologies and attract talent in key sectors, China offered an additional 132.8 billion yuan in value-added tax deductions.

Notably, another major boost came from advanced manufacturing, with value-added tax rebates and deductions amounting to 1.11 trillion yuan, underscoring the government’s focus on upgrading production lines and transitioning to high-tech, high-value manufacturing.

Li Xuhong, deputy head of the Beijing National Accounting Institute, said: “Such measures will help taxpayers fully save on operating costs through R&D expense deductions. Relief will further stimulate their vitality and drive innovation capability, all of which will be strong drivers of the development of the country’s private sector.”

VAT invoice data released by the government showed that last year, sales revenue in high-tech industries grew 9.6 percentage points faster than the national average. Revenue from technology commercialization services jumped 27.1 percent year-on-year.

The digital economy also saw steady gains, with core industries expanding 7.1% year-on-year and enterprise procurement of digital technologies rising 7.4%, reflecting deepening integration of digital tools in industrial production.