China's Economic Shift: Prioritizing Consumption for Future Growth

China is pivoting its economic strategy to prioritize domestic consumption, as its heavy dependence on investment and exports shows diminishing returns. The country's upcoming five-year plan for 2026-2030 will emphasize raising the consumption share in GDP and supporting high-tech manufacturing industries.

The new economic direction includes measures to enhance household income and amplify social spending, a move aimed at strengthening consumer purchasing power. Given China's property market woes and trade tensions with the U.S., the shift highlights vulnerabilities needing address to sustain economic stability.

President Xi Jinping underscored the increased focus on consumption amid economic pressures, with economists pushing for social welfare reforms to balance supply and demand. The full details of the five-year plan, including economic targets, will be unveiled in March.