ECONOMY

Analysis: China’s New Five-Year Plan Aims to Fix Its Spending Problem

Published: Nov. 13, 2025 5:59 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

China has laid the groundwork for its 15th Five-Year Plan, targeting a significant increase in the household consumption ratio to establish domestic demand as a stronger engine of economic growth.

This marks a strategic pivot away from the investment- and export-driven model that has long powered the nation’s economy.

The success of this transition hinges on Beijing’s ability to solve a chronic problem of low household spending, a challenge rooted in sluggish income growth, widening inequality and inadequate public services.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

China’s 15th Five-Year Plan aims to raise the household consumption ratio, shifting from investment/export-driven growth to domestic demand.
The household consumption ratio rose just 2 points from 2020–2024, standing at 39.6% in 2023—much lower than the US (67.9%), EU (51.6%), South Korea (48.9%), and Vietnam (54.3%).
Key challenges include slow income growth, widening inequality, low public service quality, and weak service sector spending.

AI generated, for reference only

Who’s Who

Everbright Securities Co. Ltd.: Everbright Securities Co. Ltd. is a financial institution that provided a report on China's household consumption ratio. According to their findings, this ratio increased by only 2 percentage points between 2020 and 2024.

China International Capital Corp. Ltd.: China International Capital Corp. Ltd. (CICC) is an investment bank. A research report by CICC suggests focusing on supply-side reforms to improve the availability of quality goods, and demand-side measures to boost employment, income, and confidence, as ways for China to address its consumption shortfall.

AI generated, for reference only