In 2026, China's top six provincial economies continue to prioritize expanding domestic demand, but with significant shifts in policy orientation. First, the focus of demand expansion is transitioning from the 2025 emphasis on "stabilizing growth and expanding aggregate volume" towards a medium-to-long-term structural optimization that emphasizes "expanding growth space and unlocking economic potential." Second, the policy approach is shifting from demand-side stimulus to a coordinated effort between supply and demand, placing greater emphasis on driving demand release through supply upgrades and scenario innovation. Expanding domestic demand is evolving from a short-term stimulus characterized by "scale priority and demand dominance" into a medium-to-long-term growth driver guided by "efficiency priority and supply-demand coordination."
Expanding domestic demand remains the fundamental basis and long-term strategic policy for sustaining China's healthy economic development. The Fourth Plenary Session of the 20th Central Committee identified "insufficient effective demand" as a major risk and challenge. The 2025 Central Economic Work Conference further noted a "strong supply, weak demand" phase in the domestic economy. As China enters the first year of the 15th Five-Year Plan period, the role of major economic provinces as "ballast stones" for stable growth becomes more pronounced. With 2026 economic growth targets generally set conservatively, the importance of expanding domestic demand has increased further. This analysis systematically reviews and compares the policy deployments for expanding domestic demand in the 2026 government work reports of six major provinces—Guangdong, Jiangsu, Shandong, Zhejiang, Sichuan, and Henan—observing the policy directions and focal points of local governments.
**I. Review of 2025 Domestic Demand and the 2026 Policy Tone**
**(I) Overall Review: Change in Top Consumer Province; Structural Growth Amid Investment Pressure**
In terms of goods consumption, the top six provinces achieved a total retail sales of consumer goods of 23.2 trillion yuan in 2025, accounting for 46.3% of the national total, a 1.3 percentage point increase from 2021, highlighting their growing role as a "stabilizer" for domestic demand. Notably, Jiangsu surpassed Guangdong for the first time, becoming the top province by retail sales with a scale of 4,639.4 billion yuan. Regarding growth rates, Shandong, Sichuan, and Henan exceeded 5%, with Shandong being the only province to surpass its initial annual target. Jiangsu, Zhejiang, and Guangdong fell short of their targets. For 2026 targets, Guangdong and Henan set more aggressive goals, with Henan targeting the highest growth at 7% among the six. Sichuan lowered its target by 1 percentage point to 6%, while Jiangsu and Zhejiang reduced theirs by 0.5 percentage points to 5%.
Service consumption is increasingly becoming a priority for residents. Compared to 2019, the share of service consumption in per capita household consumption expenditure in China increased by 2.2 percentage points in 2024. Among the top six provinces, the share of service consumption increased by 1.0, 2.2, 2.3, and 2.8 percentage points in Guangdong, Zhejiang, Shandong, and Sichuan, respectively, remained flat in Jiangsu, and decreased by 1.1 percentage points in Henan.
In fixed-asset investment, only Henan showed positive growth, while the scale of investment declined in the other provinces. Detailed breakdowns reveal structural growth and optimized resource allocation. In Guangdong, industrial and services investment fell by 14.4% and 18.9% respectively, but equipment upgrades and technological transformation investments grew under policy guidance, with software and IT services investment surging 24.9%. Jiangsu saw rapid growth in equipment procurement investment at 9.1%. Zhejiang's manufacturing investment grew 6.2%, with high-tech industry investment up 8.5%. Shandong's technological transformation investment grew 5.3%. Sichuan's industrial investment increased 7.3%. Henan performed well across all investment indicators, with manufacturing investment growth reaching 12.3%.
**(II) Policy Tone: From Short-Term Demand Dominance to "Supply-Demand Coordination"**
In 2026, all six provinces placed "expanding domestic demand" in a prominent position within their government work reports. The policy rhetoric indicates two key changes compared to 2025. First, there is a shift from short-term growth stabilization to medium-to-long-term structural optimization. While 2025 policies focused on "comprehensively expanding domestic demand" and "stabilizing the economic foundation," 2026 emphasizes "expanding new spaces for domestic demand growth," "unlocking economic potential," and "strengthening domestic demand as a primary driver," signaling a move towards sustainable and resilient growth. Second, the approach has shifted from demand-side dominance to emphasizing coordinated supply-demand efforts. To address the "strong supply, weak demand" contradiction, both sides must work in tandem. The emphasis on "supply-demand coordination" strengthened significantly in 2026. Guangdong advocates for "high-level dynamic adaptation between supply and demand," defining demand as "potential-driven consumption, demand-based production, and efficiency-oriented investment." Shandong and Sichuan stress "coordinating consumption promotion and investment expansion" and expanding the supply of high-quality products and services. This indicates a greater focus on using supply upgrades and scenario innovation to pull demand, and demand changes to push supply optimization, fostering a virtuous cycle between consumption and investment. Overall, the policies signal a clear transition: after the 2025 push for "volume expansion and expectation stabilization," expanding domestic demand is moving from "scale-first, demand-led" to "efficiency-first, supply-demand coordinated," with the main battlefield shifting from short-term fiscal subsidies to medium-to-long-term动力重塑 driven by institutional reforms and industrial upgrades.
**II. How to Boost Consumption: Enhancing Ecosystems, Building Scenarios, Improving Service Supply**
**(I) Policy Deepening: From Expanding Scope to Improving Quality and Efficiency**
The "Two New" policies (large-scale equipment renewal and consumer goods trade-ins) are the core government tools for stimulating consumption. The State Council's March 2024 action plan established the framework. In 2025, the focus was on expanding scope and volume, supported by 300 billion yuan in ultra-long-term special bonds, which increased subsidy standards and ranges, benefiting 360 million people and driving over 2.6 trillion yuan in sales. Among the six provinces, Zhejiang led with over 300 billion yuan in driven sales, followed by Guangdong (264.2 billion yuan) and Jiangsu (230 billion yuan). Overall, Zhejiang's policy had the most pronounced consumption impact, Sichuan and Jiangsu showed the strongest multiplier effects, while Henan's implementation has room for improvement.
In 2026, policy focuses more on quality and efficiency, with three main changes. First, subsidies extend from products to ecosystems. Guangdong, Shandong, and Henan propose implementing resident income growth plans, personal consumption loan issuance, improving paid leave systems, and strengthening consumer rights protection to健全 the consumption ecosystem and amplify policy leverage. Second, subsidies shift from purchase to usage. For example, Jiangsu and Zhejiang introduced dynamic subsidies for home appliance energy efficiency, and Guangdong is exploring rebate mechanisms for new energy vehicle charging costs, extending benefits throughout the consumption lifecycle. Third, the focus expands from promoting consumption to promoting circulation. Investment is used to spur consumption, such as Guangdong's efforts to build parking and mobility infrastructure matching electric vehicle ownership and usage, releasing demand potential through convenience facilities.
**(II) Consumption Scenarization: From Goods to Experiences**
China's consumption structure is shifting from goods-dominated to "goods + services." Scenario consumption, by embedding消费行为 into specific life contexts, can unlock service consumption potential through a "content + space + service" model, driving experiential services like culture, tourism, catering, performances, sports events, and exhibitions, which have significant amplification effects. For instance, the six provinces are vigorously developing "ticket stub economies" through events and performances. Guangdong, Jiangsu, and Sichuan are enhancing inter-provincial tourist appeal by hosting major sports events and large-scale concerts. The Guangdong National Games, held across the Greater Bay Area for the first time, directly drove 66.2 billion yuan in consumption and boosted annual sports goods revenue by 28.6%. Jiangsu's "Su Super League" held 16 rounds of matches, with the first six rounds alone generating 38 billion yuan in tourism, travel, dining, and accommodation revenue. Sichuan is building a performance economy hub; Chengdu hosted 134 large concerts and over 30,000 commercial performances in 2025, directly driving over 6.3 billion yuan in comprehensive consumption, with inter-provincial visitors exceeding 40%, and music industry output surpassing 63 billion yuan. Shandong, Zhejiang, and Henan are stimulating下沉 market potential through regional or rural leagues. Shandong created the "Lucky Shandong" brand with local basketball (RBA) and football leagues, implementing "sports + agriculture + tourism" models. Zhejiang and Henan are releasing county and township consumption potential through rural basketball tournaments ("ZheBA", "YuBA").
In 2026, all provinces continue to prioritize service consumption, focusing on new formats, models, and scenarios, with events, performances, and flagship store/products launches as key levers. Key areas to watch include the long-tail effects of Guangdong's "Post-National Games economy," Jiangsu's "Su Super League 2.0," and Zhejiang's "AI+" scenarios. Additionally, Sichuan and Henan propose pilot cities for new consumption formats, potentially bringing opportunities to cities like Chengdu, Mianyang, Nanchong, Zhengzhou, and Luoyang.
**(III) Demographic Precision: Meeting Intergenerational Service Needs**
Precise demographic targeting is key to activating demand. Populations can be segmented into Gen Z (18-30), the "Sandwich Generation" (30-60), the Young-Old (60-75), and the Old-Old (75+). According to the life-cycle hypothesis, income peaks in middle age, but consumption is smoothed over a lifetime. Thus, younger and older groups often consume more than they earn, while the middle-aged consume less. In China, the Sandwich Generation's consumption is often proxy consumption (for family needs), constrained by child-rearing, elderly care, and mortgages, making them primary targets for the "Two New" policies. Gen Z has higher self-indulgence spending tendencies, strong willingness to consume, and openness to new experiences, driving new consumption trends. The Young-Old, often in the "golden decade" after retirement, prioritize改善型 services like travel, social activities, and elderly education. The Old-Old focus on basic needs like accessibility modifications, healthcare, and elderly care.
Recently, silver economy demand has gained government focus, with policies in the six provinces showing two trends. First, a shift from addressing isolated needs to developing a full-fledged industry. Guangdong supports building silver economy industrial parks in Guangzhou, Shenzhen, and Foshan. Zhejiang pioneered a provincial-level silver economy industrial park in 2024. Sichuan formulated a key industry development plan for the silver economy. Second, there is a strong push for digital transformation, promoting AI integration in senior消费场景s, such as Zhejiang's "Silver Happiness Online" project and AI-based elderly education, and pilot smart elderly care communities in Guangdong and Shandong.
Due to differences in demographics, income, and urban-rural distribution, provincial reports have varying emphases. For example, Guangdong, with a younger population (only 10.2% aged 65+, among the lowest nationally), focuses on改善型消费 like pet economy, anime peripherals, and low-altitude consumption. Jiangsu, with a high aging rate (18.8% aged 65+), emphasizes elderly care services and accessibility products. Shandong, with high local resident ratios, focuses on family-centric consumption and home-based care. Henan, a major labor-exporting province, has large留守 populations of elderly and children in counties, creating strong demand for basic services like elderly care and housekeeping.
**III. How to Expand Investment: Emphasizing Efficiency, Optimizing Structure, Strengthening Private Capital Participation**
Investment policies in the six provinces for 2026 show three common trends: 1) shifting focus from scale expansion to investment efficiency; 2)明显 tilting investment structure towards new infrastructure and industrial upgrades; 3) enhancing collaboration between government investment and private capital in financing mechanisms.
**(I) Investment Goals: Emphasizing Quality, Efficiency, and Sustainability**
Most provinces have downplayed quantitative fixed-asset investment growth targets. Among the six, only Guangdong and Henan set a target of "around 5%." China faces weakening investment momentum and阶段性 pressure. In 2025, national fixed-asset investment fell 3.8% year-on-year, with manufacturing, infrastructure, and real estate development all weak. Among the six, only Henan achieved positive investment growth.
Keywords in the 2026 reports include "effective investment," "investment efficiency," and "project quality." Compared to the previous year, provinces continue the "expand effective investment" theme but place greater emphasis on project quality, investment efficiency, and the "full-chain conversion efficiency" of major projects. Guangdong, Jiangsu, Zhejiang, and Henan all propose curbing "involution-style" competition to avoid price wars, homogeneous capacity expansion, and rash project launches. This indicates a shift from factor cost-based, scale-driven investment to a quality-oriented system focusing on resource allocation efficiency and structural optimization.
The 2026 reports also add specific requirements for investment sustainability and long-term growth capacity. The national Government Work Report called for exploring full-caliber government investment plans and preventing inefficient investment. Reflecting this, Guangdong, Shandong, and Sichuan propose exploring "full-caliber government investment plans," while Zhejiang and Sichuan emphasize "whole-life-cycle project management," signaling a move from short-term tools to long-term institutional arrangements. During the 15th Five-Year Plan period, strengthening "whole-process government investment management" will be a key reform direction, potentially focusing on digital management platforms and coordination between government investment funds and special bonds.
**(II) Investment Structure: New Infrastructure, Industry, and "Investing in People" as New Growth Areas**
Investment structures are adjusting significantly. New infrastructure is becoming a key stabilizer. In 2026, investment remains underpinned by "infrastructure support," with provinces emphasizing major projects in transportation, energy, water conservancy, and new infrastructure. References to new infrastructure increased notably, with multiple provinces highlighting new energy infrastructure, digital infrastructure, clean energy, communication networks, computing centers, and low-altitude infrastructure. Guangdong explicitly advocates "moderately超前 building new infrastructure" to support digital and future industries. Jiangsu and Zhejiang position new infrastructure as a vehicle for stimulating private investment, shifting models towards "government guidance + market investment."
The weight of industrial investment in major projects has also risen significantly. Zhejiang is most prominent, with industrial projects comprising 58% of its first batch of major projects for 2026, and aiming to attract over 3,000 major industrial projects with investment exceeding 100 million yuan. Sichuan is focusing on "rooted industries, effective investment, and sustainable tax source" projects, pushing for rapid operationalization of projects like BOE and HKC.
Furthermore, major provinces are extending investment focus to "human development" to foster investment-consumption synergy. Guangdong and Shandong propose "increasing the proportion of government investment in livelihood areas" like education, healthcare, and elderly care to release consumption potential through better public services. Zhejiang and Sichuan emphasize "expanding the supply of high-quality goods and services," highlighting the cultivation of high-level market entities and efficient mechanisms.
Overall, against a backdrop of overall investment pressure, the trend of "infrastructure support, industrial drive, and continuous structural optimization" is clear. While expanding effective investment, provinces are increasingly focused on optimizing consumption supply and enhancing public services to create a more sustainable domestic demand growth engine. The function of government investment is evolving from a mere stabilization tool to a means for cultivating new industries, building digital infrastructure, and enhancing long-term regional development momentum.
**(III) Investment and Financing Mechanisms: Strengthening the Role of Private Investment**
Stimulating private investment is crucial for stabilizing investment amid current weaknesses. However, private investment is volatile and cyclical, sensitive to institutional environment, factor supply, and confidence. Since 2022, China's private investment growth has consistently lagged behind total fixed-asset investment growth. In 2025, private fixed-asset investment fell 6.4%, and its share of total investment hit the lowest point since 2012. Manufacturing investment, predominantly private, grew a mere 0.6%.
The 2026 Government Work Report places activating private investment vitality in a key position for stabilizing investment and growth, calling for implementing policies to promote private investment, improving mechanisms for private enterprise participation in major projects, and guiding private capital towards high-tech and modern services. The six provinces are deploying policies across market access, project participation, and factor保障.
First, they are放宽 market access to expand private capital's scope. Guangdong pledges to "actively support private capital participation in all possible industries, fields, and project investment, construction, and operation," including elderly care systems. Zhejiang stresses adhering to the "non-prohibited即入" principle. Sichuan aims to break hidden barriers and ensure fair competition and resource access for private firms. Overall, provinces are using institutional arrangements to open up infrastructure and public services to private capital.
Second, they are increasing private participation in major projects and guiding capital into key sectors. The ongoing technological and industrial revolution creates new investment opportunities. Zhejiang plans to recommend over 100 major projects to private capital annually, with minimum 10% private stakes in offshore wind power and nuclear projects, and support for private investment in new infrastructure and new quality productive forces. Jiangsu will improve long-term mechanisms for private participation in major projects, guiding investment into high-tech, modern services, and new infrastructure. Sichuan will use new Public-Private Partnership (PPP) mechanisms to guide private capital into major projects.
Third, they are strengthening factor resource保障 to enhance project implementation capability. Private enterprises often face challenges regarding rights protection, innovation support, and financing. Several provinces are using fiscal-financial coordination policies to improve financing conditions. Zhejiang proposes that "no less than 80% of special industrial funds, new energy consumption quotas, and new industrial land should support private investment projects." Henan will optimize subsidy policies for loans to service industry entities, equipment updates, and SMEs to lower financing thresholds and costs. Jiangsu is broadening social capital participation channels and improving capital recycling efficiency by revitalizing存量 assets and promoting infrastructure REITs pilot projects.
Overall, 2026 provincial investment policies are shifting from reliance on专项债 and budgetary investment as temporary tools towards building an investment and financing system based on "fiscal fund guidance + social capital participation + capital market exit." Looking ahead to the 15th Five-Year Plan period, with the further development of the infrastructure REITs market and continuous optimization of private investment participation mechanisms, social capital's role in infrastructure and industrial investment is expected to increase, providing more stable and sustainable funding sources for expanding effective investment.
**IV. Business Implications: Focus on the "Four New" Directions**
Future business布局 should focus on the "Four New" directions: New Consumption Scenarios, New Infrastructure Construction, New Industrial Investment, and the New Opportunities from the Expansion of Private Investment.