On August 7, 2025, citizens and tourists were seen shopping and taking photos at Xian'anfang, the intersection of Nanjing Road and Shengli Street in Hankou, Wuhan.
In a signed article published in *Party Building* magazine, Zheng Zhankie, Director of the National Development and Reform Commission, outlined key tasks for the "16th Five-Year Plan" period. These include strengthening domestic circulation, facilitating dual domestic and international circulation, and ensuring livelihood improvements amid development.
Zheng emphasized enhancing social welfare and advancing common prosperity. Priorities include implementing employment-first strategies, refining income distribution systems, and increasing the share of household income in national income distribution, as well as raising labor remuneration in primary distribution. Against rising external uncertainties, boosting domestic consumption—contingent on higher household income—will play a pivotal role.
The "16th Five-Year Plan" proposal highlights market-driven primary distribution mechanisms that reward contributions, ensuring higher pay for skilled and innovative labor. It also advocates for wage negotiation systems, minimum wage adjustments, and corporate wage guidance.
Yang Weimin, former Vice Minister of the National Committee of the Chinese People's Political Consultative Conference, noted China’s low household consumption share stems from disproportionate income distribution and a large low-income population. He stressed that reforming income systems is critical for a consumption-driven growth model and achieving modernization breakthroughs by the "16th Five-Year Plan" period.
Liu Shijin, ex-Deputy Director of the State Council Development Research Center, proposed stabilizing wage and business income through urbanization and employment expansion. For transfer income, he suggested narrowing urban-rural public service gaps, converting unsold housing into affordable units, and reallocating fiscal stimulus to low-income groups. For property income, he recommended transferring state capital to social security funds to raise monthly pensions from 246 yuan to 1,000 yuan.
Beyond income growth, Zheng reiterated expanding domestic demand by revitalizing consumption, increasing effective investment, and dismantling barriers to a unified national market to better integrate domestic and international cycles. This marks his second recent emphasis on domestic demand, following a November 28 *People’s Daily* article advocating for deregulating consumption and adapting policies to new consumption models.
CITIC Securities predicts upcoming policies will stabilize consumption by enhancing service quality and supply diversity, mitigating volatility from premature durable goods demand. Wu Chaoming, Chief Economist of Caixin Financial Holdings, stressed aligning supply with upgraded demand to foster a dynamic balance, shifting from one-sided "stimulus" strategies to mutual reinforcement between demand-driven supply and supply-created demand.