My Take | Will AI and robots drive China’s next consumer spending spree?

China is seeking the next ‘big items’ to encourage consumers to open their wallets. Technology looks to be a key

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A humanoid robot seen at an expo in China’s northern city of Tianjin. Photo: Xinhua

Published: 7:00am, 18 Mar 2025Updated: 7:01am, 18 Mar 2025

China published a new action plan last Sunday aimed at boosting consumer spending, and the immediate question for many observers was whether this “spend, spend, spend” initiative will be effective this time around.

Historically, China has pursued strategies to stimulate domestic spending since the late 1990s, when the country began producing more goods than it could consume or export. Two primary schools of thought have emerged on how to encourage increased spending.

The first focuses on the demand side, which asserts that as people’s incomes rise, their spending tends to increase accordingly. Proponents of this approach advocate for steady growth in household incomes and national income distribution. During China’s annual parliamentary gathering in March, there were plenty of proposals for cutting personal income tax.

The second perspective emphasises the supply side of consumer spending. This suggests that the average disposable income of Chinese residents has been rising in tandem with economic growth. According to official data, the per capita disposable income in China grew by 5.3 per cent in 2024, aligning with a gross-domestic-product growth of 5 per cent.

That viewpoint posits that Chinese households have already accumulated sufficient spending power, and the key to boosting consumption lies in providing attractive products and services that would encourage consumers to open their wallets.

A family walks past a shopping centre in Beijing. Photo: AFP

Beijing has attempted to address both perspectives in its consumption strategies. But in practice, it often leans toward supply-side initiatives, which do not involve difficult structural reforms.