Putting people first to revive consumer spending

A walk in the park costs nothing, but it could lead to spending on a cup of coffee, a meal out or a weekend trip. Similarly, family gatherings and socializing with friends can spur spending. However, before people open their wallets, they need something more intangible: the time and energy to truly enjoy life.

This connection offers a fresh perspective on China's efforts to boost household consumption. A wide range of measures, from income support and social security to consumer subsidies and trade-in programs, aim to encourage spending. Yet consumption remains a modest part of economic activity.

In 2025, household consumption accounted for about 40 percent of China's GDP, up about 1.5 percentage points over the previous decade.

The challenge is not simply whether people have money to spend. It is also whether they feel confident about the future, find goods and services that meet their needs, and have enough time to enjoy what their income can buy.

A noteworthy trend emerged in 2025: per capita consumption grew more slowly than per capita disposable income, with the gap widening as the year progressed. This suggests that higher incomes don't automatically translate into stronger spending. Factors such as job security, income growth and future expenses influence decisions just as much as current purchasing power.

These concerns assume greater importance as China transitions to new growth drivers, including artificial intelligence. While emerging technologies can boost productivity, create new industries and enhance services, they don't always immediately translate into broad-based employment growth. AI-driven industries may generate substantial economic value without creating as many jobs as previous technological shifts.

For workers navigating this transition, uncertainty about the availability and quality of jobs can lead to precautionary saving. Families tend to delay discretionary purchases when they are unsure about future income security. Therefore, supporting consumption also means ensuring that technological progress is accompanied by opportunities for people to participate in the economy and share its benefits.

But income and confidence are only part of the picture. Consumption is not an isolated economic transaction; it is intertwined with people's lifestyles. People have needs as individuals, family members and participants in society.

Some needs, such as food, housing, healthcare and financial security, are immediate and essential. Others relate to development, recreation, relationships and a sense of belonging. These needs are interconnected, but not all depend solely on money.

A family might be able to afford a weekend outing but doesn't have the time to take one. A worker may have the means to eat out yet be too exhausted after a long day. Someone may wish to pursue a hobby, visit friends or explore a nearby destination but find that work leaves little time for anything beyond daily necessities.

When time is scarce, consumption can narrow down to essentials. What appears as reluctance to spend in economic data might actually be a lack of opportunity to enjoy life beyond work.

It is here that non-market activities become economically significant. Walking, exercising, spending time with family and meeting friends may contribute little to the GDP directly, but they create the conditions for spending.

A stroll can lead to a drink at a café; a day in the countryside can bring business to restaurants; a relaxed weekend can generate demand for accommodation and local attractions.

Leisure is not just a reward that comes from economic activity; it can also help generate it.

When people have the time and energy for social life, they are more likely to explore new experiences, services and activities that bring enjoyment.

That does not mean leisure should be justified solely by its contribution to economic growth. Rest, family life and social connections have their own value. A healthy economy should make room for these, rather than measure well-being solely by the volume of goods and services purchased.

The question of working time is therefore relevant to China's consumption agenda. It is important to ensure that workers can take the rest and leave which they are entitled to. Effective enforcement of labor protections, alongside a workplace culture that values productivity rather than simply time spent on the job, can help people balance professional responsibilities with personal life.

No single measure will resolve China's consumption challenge. Sustained progress requires stable employment, reasonable income growth, stronger social protection, accessible public services and a more responsive supply of goods and services. Better protection against future risks can also give households the confidence to spend rather than save for every possible uncertainty.

Ultimately, a consumer economy depends on more than purchasing power. It relies on people having both the means and the freedom to make use of it. Providing security to households is important, as is giving them space to live.

When people have time to rest, care for their families, maintain social ties and explore the world around them, spending can emerge more naturally from everyday life. Putting people first is not separate from the goal of stronger consumption; it is integral to making that goal sustainable.

The author is the dean of the School of Economics, Renmin University of China.

The views don't necessarily reflect those of China Daily.

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