Plan to elevate consumer confidence

China is intensifying its drive to increase economic growth through consumer spending, with authorities setting out a three-year action plan to optimize the environment for consumption.

The plan, formulated and released in February by five central government departments, including the State Administration for Market Regulation and the Ministry of Commerce, requires authorities to carry out several major initiatives aimed at improving the quality of consumer products and services.

The initiatives comprise more than a dozen measures in total and will last until 2027, the plan said, adding that the initiatives should lead to a significantly elevated level of convenience, comfort and satisfaction for consumers.

Revitalizing consumption has topped China’s economic agenda for this year. According to the 2025 Government Work Report, the country will “vigorously boost consumption”, and formulate special measures to improve the consumption environment.

The three-year action plan, the country’s first State Council-approved document targeting the consumption environment, said China will keep increasing the variety, upgrading the quality and creating more well-known brands of consumer products.

While continuing to encourage the trade-in of big-ticket items such as automobiles, electronic products and home appliances, the plan said the country supports efforts to make domestically made clothes, jewelry, leather goods and makeup products more premium and fashionable through innovation.

The plan addresses issues of great concern for the public by calling for the implementation of stringent standards and regulations for food and drug safety, and imposing harsh punishment on business operators who breach them.

Regulators will continue to seriously penalize food producers and sellers that use excessive or illegal additives during food processing, pass off inferior products as superior ones, and use faulty scales to cheat consumers, it said.

To guarantee consumers’ rights to be informed, to choose independently and to make fair deals, the plan said the issue of consumers signing unfair agreements for services they purchase, including online shopping, courier services and apartment renovation, should be remedied.

In the meantime, it called for heightened efforts to lower risks in prepaid services, the sector from which occasionally sees companies shutting down their business abruptly, leaving customers struggling to recover their deposits.

Authorities must ensure companies offering prepaid services sign written agreements with customers, follow the agreements, inform customers in advance of possible business changes and return deposits promptly if they can’t continue the services, the plan said, urging them to explore ways to escrow the deposits.

It also asked companies, governments and courts to come up with more effective solutions to consumer disputes, and encouraged third parties to join dispute mediation.

Zhu Keli, founding director of the China Institute of New Economy, said the measures put forward in the plan will play a significant role in alleviating the outstanding problems consumers face.

“The influence the consumption environment imposes on consumption should not be underestimated,” Zhu said.

An improved consumption environment will help form a virtuous cycle where demand drives high-quality supply, and the supply in turn creates more robust demand, thus contributing to the country’s growth, he said.

China has issued a series of policies to stimulate consumption over the past year.

In January, the country expanded its program to upgrade equipment and trade in consumer goods, which began in March last year, by increasing subsidies for the program and adding cellphones, tablets, smartwatches and other products to the trade-in subsidy list.

It has introduced policies to encourage the supply of elderly care products and tailored-made services for older adults, such as train trips specially designed for senior tourists.

Meanwhile, officials have pointed out that there remain “quite a few weak links” in the environment for consumption.

Existing regulations are lagging behind as the country is seeing more new forms of services, the officials from the five departments that issued the action plan said in a statement.

In traditional sectors, on the other hand, issues concerning product quality and safety have not been effectively addressed, and cases of major violation of consumers’ rights “happen from time to time”, dampening people’s will to make purchases, they said.

Also, the number of disputes between consumers and product and service providers has risen rapidly, they said, adding that the action plan was issued with a goal of effectively easing these problems within three years.

“Like a good business environment and ecological environment, a good consumption environment is a basic public good for a region and even a country,” they said.

The policy measures set out in the plan for the next three years are “only the beginning to the long-term project of building up the consumption environment”, they said, adding that the government welcomes all other sectors to take part in the project.

Chen Yinjiang, deputy secretary-general of the Consumer Protection Law Association of China Law Society, said by setting requirements for a wide range of products and services, the action plan is a feasible guideline for local authorities to follow and improve consumer experience.

New forms of business, such as ride-hailing, digital services behind paywalls and selling goods through livestreaming, have met people’s emerging demands, but such goods and services come with new risks of consumer rights violations that could escape scrutiny, Chen said.

Chen called on associations, guilds and major companies to formulate specific standards to guide the sound development of these emerging fields. Procedures for handling complaints and disputes should be further expedited to better protect consumers’ rights, he said.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said the action plan will serve as “continued and steady momentum” to reduce uncertainty in the consumption environment and allow consumers to make more stable decisions.

Consumption is an important part of domestic demand, which is a major driving force for China’s steady economic growth, Zhou said.

China has faced insufficient demand due to several reasons, including relatively slow growth in income for certain groups of people and the long-standing and strong inclination toward saving, Zhou said, adding that the fact has led to the country stepping up efforts to unleash the potential of consumption in various sectors.

Zhou suggested differentiated policies for different regions. In addition to simply issuing coupons, the introduction of digital renminbi and the further expansion of trade-in programs will also help boost consumption, he said.