Plan to bring tangible benefits

China's concerted efforts to expand domestic demand under the 15th Five-Year Plan (2026-30) are not only strengthening its own economic balance but also delivering tangible benefits to economies worldwide, particularly in the Global South, experts said.

Sourabh Gupta, senior fellow at the Institute for China-America Studies, said the plan features important measures to stimulate consumption and investment while advancing industrial upgrading.

"On the industrial upgrading front, good progress is being made. They are trying to rationalize various sectors where there is overcapacity. The whole purpose is to streamline those sectors while making them more competitive at the same time," Gupta told China Daily.

He said even industrial upgrading counts toward consumption in national accounting terms as final private domestic purchases. Practical steps in the plan include building more charging stations, promoting leisure consumption, ice and snow tourism, recycling systems, and encouraging inbound tourism shopping.

Gupta highlighted one potentially significant long-term reform: shifting the collection point for value-added tax and consumption tax from upstream to downstream. This change could give local governments stronger incentives to boost consumption since their tax revenues would rise directly with retail activity.

He also recalled the policies introduced in July 2024, which called for accelerating the building of a stronger social protection system, including household registration reform, old-age insurance and workers' compensation. Such measures are essential for rebalancing the Chinese economy toward greater household consumption.

Turning to the international dimension, Gupta explained how China's domestic demand expansion and industrial upgrading would support the Global South economies.

"There are two dimensions: exports and imports. When China's domestic demand increases, it brings in a lot more imports. That's good for exporting countries," he said.

High-efficiency tech

Regarding industrial upgrading, Gupta said China's leadership in solar, batteries, electric vehicles and other green technologies presents concrete opportunities. Developing countries can import these affordable, high-efficiency technologies, receive Chinese investment in local factories, or benefit from Belt and Road Initiative financing for infrastructure and electrification.

"As China moves up the value chain, it creates space below," Gupta said. "It can relocate lower-end production — textiles, garments, footwear — to Southeast Asia, Vietnam, African countries, etc. Then China imports those finished goods back. This fires up the export engines of those developing countries."

Chris Pereira, founder and CEO of iMpact, a New York-headquartered communications and business consulting firm, described the broader spillover effects.

"China's push for domestic growth is creating a massive 'spillover effect' for the Global South," Pereira said. "As China moves up the value chain, it's not just exporting goods, but also affordable, high-efficiency technology. By aligning with China's technological pace, developing nations can leapfrog traditional development hurdles. This isn't charity; it's a symbiotic partnership."

He said the plan will turn China's 1.4 billion consumers into a powerful force for industrial upgrading.

"The 15th Five-Year Plan's focus on boosting domestic demand isn't just about encouraging people to buy more; it's a strategic move to accelerate China's industrial upgrading," Pereira said. "For global firms, this has become a premier 'testing ground' where they can refine their most advanced technologies at 'Shenzhen speed' before scaling them globally."

At a time of heightened global uncertainty, China's stable and expanding domestic market offers a valuable anchor of confidence. In her April 9 speech ahead of the International Monetary Fund and World Bank Spring Meetings, Kristalina Georgieva, the IMF managing director, emphasized that "a resilient world economy is being tested again" by external shocks and that "the strength and agility of your fundamentals is your best defense when shocks come". She stressed that good policies make a real difference.

Helene Rey, professor of economics at London Business School and incoming economic adviser and head of the Monetary and Economic Department at the Bank for International Settlements, said on April 15 at one of the IMF panels during the annual meeting on "Global Imbalances" that "the 15th plan in China is pointing out that one way of making progress from this structural macroeconomic point of view is actually to invest in people", for example, invest more in healthcare.

Clear receptiveness

Georgieva, speaking at the same IMF panel, said China is showing clear receptiveness to shifting toward stronger domestic consumption, which benefits both China's development and global economic stability.

Gupta echoed this view, saying China's continued growth and rebalancing contribute positively to global stability. "Just China being stable and growing is already a huge positive," he said.

At a Peterson Institute for International Economics seminar on April 9, Tianlei Huang, a senior fellow at PIIE, said that China still possesses fiscal space to implement more forceful countercyclical policies to support domestic demand.

Karen Dynan, a nonresident senior fellow at PIIE and professor at Harvard University, said at the same seminar that "the disruptions we have seen from the war, both higher energy prices and disruptions to supply chains, have lowered expected growth", underscoring the importance of strong domestic demand in major economies like China for global stability.

Other recent analyses from international organizations and think tanks also support this view. Dan Katz, first deputy managing director of the IMF, said in his remarks at the China Development Forum last month: "Their 15th Five-Year Plan prioritizes increasing consumption as a driver of economic growth, which would also help reduce China's external imbalances.

"These are helpful measures, but China can do more to increase consumption and domestic demand — especially for services — by boosting household incomes and reducing incentives for precautionary savings," Katz added.

Pereira concluded that China's expansion of domestic demand under the 15th Five-Year Plan is creating shared opportunities that allow companies and economies worldwide to benefit from its growth.

"As China doubles down on its own growth through domestic consumption and industrial upgrading, there's plenty of room at the table for those ready to engage. China remains the engine, and pragmatic companies see the opportunities as more tangible than ever," he said.