Commentary: Behind the Headlines of China’s Consumption Conundrum
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Insufficient domestic demand — particularly weak household spending — has emerged as one of China’s most pressing economic challenges. The issue resurfaced this week after Commerce Minister Wang Wentao drew comparisons between U.S. and Chinese consumption, sparking a heated national debate.
At a press conference on July 18, Wang asserted that China’s role as the world’s second-largest consumer market is “more secure than ever.” He cited official figures showing total retail sales of consumer goods rising from 39.1 trillion yuan ($5.4 trillion) in 2020 to 48.3 trillion yuan in 2024, reflecting an average annual growth of 5.5%.
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- China’s retail sales grew from 39.1 trillion yuan ($5.4T) in 2020 to 48.3 trillion yuan in 2024, averaging 5.5% annual growth.
- Despite strength in goods, China’s residential consumption rate was 39.9% in 2024, below the U.S.’s 68% (2023) and EU’s 52% (2023), exposing weak household spending.
- Economists urge focusing on services and structural reforms, as boosting domestic demand is a policy priority amid sluggish income growth.
- 2013-2024：
- China led the world in online retail for 12 consecutive years.
- 2020：
- China's total retail sales of consumer goods reached 39.1 trillion yuan.
- 2020-2022：
- The COVID-19 pandemic period, during which Chinese household appetite for spending cooled.
- 2023：
- The European Union's residential consumption rate was 52%.
- 2024：
- China's total retail sales of consumer goods rose to 48.3 trillion yuan and its residential consumption rate was 39.9%, compared to the U.S.'s 68%.
- End of 2024：
- China’s top economic policymakers placed 'boosting consumption' at the center of their strategy to stimulate domestic demand.
- June 2025：
- Economist Yu Yongding published an essay arguing China's goods consumption-to-GDP ratio is already 1.25 times that of the U.S.
- July 18, 2025：
- Commerce Minister Wang Wentao held a press conference asserting China’s status in the global consumer market.
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