Published by ChinaMNC · Wanning
China’s Consumption Boost: What Foreign Founders Need to Know
The 2026 Government Work Report prioritises boosting consumption through a four-pronged approach. Here’s how foreign founders can interpret the policies for their China operations.
China’s Consumption Boost: What Foreign Founders Need to Know
For the second consecutive year, China’s Government Work Report places domestic demand expansion at the top of its agenda, with a special focus on the “special action to boost consumption.” The 2026 report emphasises stimulating internal consumption drivers alongside supportive policies. The strategy is built on four methods: addition, subtraction, multiplication, and division.
Addition: Raising Incomes and Improving Supply
On the demand side, the focus is on increasing household income; on the supply side, improving quality and services. For the first time, a plan to raise urban and rural residents’ incomes will be implemented, with measures to boost low-income groups, increase property income, and refine salary and social security systems. The goal is to put more money in people’s pockets and fundamentally enhance consumption capacity.
The government acknowledges that consumption supply has weak spots. It plans to cultivate new growth areas, implement actions to improve service consumption, and pilot new consumption formats and scenarios. Key areas include culture and tourism, the automotive aftermarket, sports events, the performing arts economy, and experience-based services. Support will also be given to upgrade consumption channels and scenarios in lower-tier markets, accelerating brand chain expansion to unlock potential.
Subtraction: Reducing Burdens
To unleash consumption potential, the government will reduce residents’ worries. This year, support for healthcare, elderly care, and childbirth and childcare will increase. Measures include raising medical insurance subsidies and developing affordable childcare services. These steps aim to make people more willing and able to spend.
Multiplication: Fiscal-Financial Synergy
Last year, trade-in programmes for consumer goods drove sales of related products to 2.61 trillion yuan, benefiting 366 million person-times. This year, support for offline retail will increase, focusing on trade-ins for cars, refrigerators, washing machines, TVs, and other high-impact items. New products like smart glasses will be added. A new 100 billion yuan special fund will promote domestic demand through fiscal-financial coordination. Interest subsidy policies for service sector loans and personal consumption loans will be optimised, with expanded coverage and higher caps.
Division: Removing Barriers
The government will dismantle hidden barriers and clear restrictive measures. This includes simplifying approval processes for promotional activities, relaxing vehicle purchase restrictions and increasing license plate quotas in some cities, and supporting qualified street-front shops to operate outdoors. Local governments are actively pushing these measures.
Practical Takeaways for Foreign Founders
- Consumer-facing sectors: The focus on service consumption, new retail formats, and lower-tier markets creates opportunities in tourism, automotive aftermarket, sports, entertainment, and experience-based services. Consider aligning your product or service offerings with these priority areas.
- Trade-in programmes: If you sell consumer goods such as cars, home appliances, or smart devices, participate in trade-in schemes to benefit from subsidies and increased consumer interest.
- Financing support: The new fiscal-financial coordination fund and expanded interest subsidies for service sector loans and personal consumption loans can reduce financing costs for eligible businesses and consumers. Explore whether your company qualifies.
- Regulatory simplification: Simplified approval for promotions and relaxed rules for outdoor displays can make it easier to run marketing campaigns and expand physical retail presence.
- Lower-tier markets: As brand chains accelerate expansion into lower-tier cities, foreign founders should assess distribution strategies and partnerships to tap into these growing markets.
These policies are part of a broader effort to stimulate consumption and create a more favourable environment for businesses. Foreign founders should monitor local implementation and consider how these measures can support their China operations.
For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.