Archive · 29 Oct 2025
China Urged to Set Consumer Spending Target in Next Five-Year Plan
China is planning its next five-year economic roadmap, which will run from 2026 to 2030.
Some people think China should focus even more on making new technology and industries.
However, a writer named Stephen Roach thinks China should focus on something else: getting people to spend more money.
He believes that for China to become a rich country like others, its people need to buy more things, making up a bigger part of the country's total economy.
Right now, people's spending is about 40% of China's economy.
Roach suggests a goal to make it 50% by the year 2035.
He argues that other ways China has grown, like building a lot or selling things overseas, are becoming harder.
So, getting people to spend more is the best way to keep the economy growing strong.
He thinks setting this specific goal will help China's leaders pay more attention to helping people spend.
China's 15th Five-Year Plan (2026-2030) is nearing release, with early signs pointing to continued focus on industrial and technological advancement.
Economist Stephen Roach argues China should prioritize boosting household consumption to 50% of GDP by 2035, up from nearly 40%.
This consumer-led rebalancing is seen as crucial for China's long-term goal of becoming a great modern socialist country with advanced economy living standards.
Roach suggests that traditional growth engines like property, exports, and fixed-asset investment are facing limitations, placing the onus on consumer spending.
Setting an explicit consumption target would provide focus and accountability for policymakers, similar to price-stability or full-employment goals in Western economies.
- Who
- Stephen Roach, a faculty member at Yale University and former Chairman of Morgan Stanley Asia
- What
- Urges China to set an explicit target to boost household consumption's share of GDP to 50% by 2035 in its upcoming 15th Five-Year Plan.
- When
- Ahead of the formal release of the 15th Five-Year Plan in March 2026.
- Where
- China
- Why
- To address the country's most daunting challenge of rebalancing its economy towards consumer-led growth, which is necessary for achieving the goal of becoming a great modern socialist country with advanced economy living standards by mid-century.
Focus on "New Productive Forces"
Focus on Consumer-Led Rebalancing
Economic Growth Strategy
Focus on "New Productive Forces"
Continue to prioritize industrial and technological advancement driven by "new productive forces."
Focus on Consumer-Led Rebalancing
Shift focus to boosting household consumption as a percentage of GDP to rebalance the economy.
Setting Targets
Focus on "New Productive Forces"
Planning exercise should naturally incorporate various goals like employment and innovation.
Focus on Consumer-Led Rebalancing
A specific, numerical target for household consumption is necessary for focus and accountability.
- Next Five-Year Plan Duration
- 2026-2030
- Current Household Consumption as % of GDP
- Nearly 40%
- Proposed Household Consumption Target Year
- 2035
- Proposed Household Consumption Target % of GDP
- 50%
- Historical Economic Issue Identified
- Four Uns (unstable, unbalanced, uncoordinated, unsustainable)
- Required Per Capita GDP Growth (2030-2049)
- 5.75% per year
