China’s top economic planner said on January 20 that authorities are drafting a package of measures aimed at raising urban and rural household incomes as part of a broader effort to shore up domestic demand. At a State Council press briefing, Zhou Chen, director general of the National Development and Reform Commission’s (NDRC) National Economic Comprehensive Department, said officials are studying a “steady employment, expand and upgrade” initiative alongside an explicit plan to boost residents’ incomes.
The comment came alongside data showing per‑capita disposable income reached 43,377 yuan in 2025, a 5.0% nominal and real increase year‑on‑year, roughly in step with economic growth. Consumption’s share of GDP growth has risen notably: domestic demand accounted for more than 67% of growth last year while consumption contributed 52%, making household spending an increasingly important stabiliser for the economy.
Zhou framed the new measures as part of three tightly linked priorities: marrying welfare improvements with consumption stimulus; combining investment in goods with investment in people; and coupling supportive policies with structural reforms. Concrete instruments flagged include continuing the “trade‑in” subsidy for consumer goods (with an initial tranche of over 60 billion yuan already disbursed), a focused push to expand and upgrade services capacity, and targeted actions to stabilise jobs.
The NDRC also signalled more active use of government investment and policy finance. Officials said they will optimise the composition of public investment toward more livelihood projects, deploy novel policy financial tools to leverage private capital, and maintain fiscal and credit mechanisms—loan interest subsidies and guarantee compensation among them—that aim to produce multiplier effects beyond their headline cost.
Beyond short‑term demand stimulus, Beijing plans regulatory steps to unblock persistent structural frictions. Zhou listed measures to clear unreasonable restrictions on consumption, test new consumption formats and scenes, improve investment‑financing mechanisms for major projects, and strengthen mechanisms for private firms to participate in national infrastructure—moves intended to keep private investment from stagnating.
The policy push underscores an uneasy balance: income growth and consumption have become crucial supports for growth, yet officials acknowledge a “domestic supply strong, demand weak” mismatch. That diagnosis points to both cyclical tasks—boosting immediate purchasing power and employment—and longer‑term structural aims such as reorienting investment toward services and human capital.
For an international audience, the significance is twofold. First, Beijing’s active menu of demand‑side and supply‑side measures signals a pragmatic re‑balancing away from an exclusive reliance on heavy investment and exports; second, the focus on incomes and services will have knock‑on effects for global trade and commodity markets depending on how effectively household demand responds. Whether these measures close the demand gap will determine China’s near‑term growth resilience and the spillovers for trading partners.