The following document is China’s short- to mid-term strategy for expanding domestic demand in its economy. Although its theme is increasing Chinese consumer demand, the strategy is wide-ranging and includes calls to increase the quantity and quality of the supply of goods and services and to improve China’s social safety net. It does not, however, set any metrics to measure how well the strategy is being implemented. Note that although this document is merely the “outline” of the plan to expand domestic demand, it is likely that this “outline” will be the fullest version of the strategy that China makes public.

The Chinese source text is available online at: http://www.gov.cn/zhengce/2022-12/14/content_5732067.htm

An archived version of the Chinese source text is available online at:    https://perma.cc/P6BD-34LF

U.S. $1 ≈ 6.9 Chinese Yuan Renminbi (RMB), as of March 13, 2023.

Outline of the Plan for the Strategy to Expand Domestic Demand (2022-2035)

Firmly implementing the strategy to expand domestic demand (扩大内需战略) and cultivating a complete domestic demand system is an inevitable choice for speeding up construction of the new pattern of development that takes domestic great circulation as the mainstay and in which domestic and international dual circulation are mutually reinforcing (以国内大循环为主体、国内国际双循环相互促进的新发展格局), and is a strategic decision for promoting the long-term development and lasting peace and stability of China. This plan outline has been formulated in order to promote implementation of the strategy to expand domestic demand, in accordance with the Outline of the People’s Republic of China 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035.¹

I. Plan Background

(1) China’s domestic demand expansion has achieved remarkable results

Since the beginning of reform and opening up [in 1978], and especially since the 18th Party Congress [in 2012], China has participated deeply in the international industrial division of labor, while at the same time constantly improving the quality level of domestic supply, focusing on releasing domestic market demand and promoting the formation of a strong domestic market, and the role of domestic demand in supporting economic development has been significantly enhanced.

The fundamental role of consumption has continued to strengthen. The share of final consumption expenditures in gross domestic product (GDP) has remained above 50% for 11 straight years. Traditional consumption, such as housing and transportation consumption, has grown significantly, the per capita housing floor area of urban residents has risen steadily, and our new car sales have ranked first in the world for 13 consecutive years. New business formats (新业态) and new models of consumption are developing rapidly. In 2021, online retail sales of physical goods accounted for 24.5% of total retail sales of consumer goods, and consumption spending for services accounted for 44.2% of consumption spending per capita.

Investment’s key role is being played better. China’s total capital formation as a percentage of GDP has remained at reasonable levels, providing strong support for optimizing the supply structure and promoting stable economic development. The level of infrastructure construction has improved across the board, the linking up of nationwide comprehensive transportation corridors has accelerated, and a number of major water conservancy facilities were completed and put into use. Construction of new infrastructure such as 5G has accelerated, major science and technology (S&T) projects have made remarkable achievements, and investment in high-tech industries has continued to grow at a relatively fast rate. Shortcomings and weaknesses in fields such as medicine and health, ecological and environmental protection, agriculture and rural areas, and education are being overcome at a faster pace.

Domestic market operation mechanisms have improved continuously. Construction of a high-standard market system has been accelerated, reforms to “delegate authority, streamline management, and improve service” (“放管服”) have been deepened, the business environment has been optimized, and steady progress has been made in key reforms in areas such as the marketized allocation of factors of production (要素) and the property rights system, among others. Improvement of the circulation system has accelerated, the social security system has been gradually refined, formation of the basic public service system in urban and rural areas has been sped up, and market vitality has been effectively stimulated.

The international and domestic markets have become more closely linked. China’s GDP has surpassed 110 trillion Chinese yuan Renminbi (RMB) and become the world’s second largest commodity consumption market. This has led to sustained expansion of the scale of imports and continuous structural optimization. International economic and trade cooperation has been solidly advanced, and remarkable progress has been made in building China into a bastion of opening up to the outside (对外开放). China has become one of the most attractive countries for inflows of foreign capital, the quality of foreign capital utilization has been continuously improved, and China’s market has achieved further coordinated development with the global market for mutual benefit.

(2) Major significance

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1. Translator’s note: CSET’s English translation of China’s 14th Five-Year Plan Outline is available online at: https://cset.georgetown.edu/publication/china-14th-five-year-plan/.