China Watch: 15th FYP consumption goals: No low-hanging fruit, but within reach

研报英文原文证据摘录

China Watch: 15th FYP consumption goals: No low-hanging fruit, but within reach

c.60tn retail sales by 2030; higher HH consumption ratio

The FYP sets one numerical goal towards expanding the domestic retail sales market. It

targets total retail sales (goods plus some of the catering services) to reach around

RMB60tn by 2030, up from RMB50.1tn in 2025, implying a relatively modest 3.7%

average annual nominal growth over the next five years.

At first glance, the target appears achievable, as it is broadly in line with last year's retail

sales growth of around 3.7% yoy and is likely to be below China's nominal GDP growth

over the next five years (government is seeking real GDP growth to average above 4.2%

yoy through 2030, while CPI inflation should remain in positive territory). However, given

the currently soft retail-sales momentum (at only 1.4% ytd), achieving this goal would

still require a meaningful acceleration in consumer spending from current levels, in our

view.

Additionally, we believe the more important objective is the plan's commitment to

"markedly" raise the household consumption ratio, which currently stands at around 40%

of GDP. This ratio has largely remained within a similar range over the past decade

(Exhibit 2), underscoring the structural difficulty of shifting China's growth model

towards household consumption.

While the absence of a numerical target limits its usefulness as a binding policy

benchmark, achieving a meaningful increase from the current level would itself represent

a significant step forward in the rebalancing agenda. In our view, this would require not

only stronger consumption growth, but also sustained progress in boosting household

income, reducing precautionary savings, fulfilling new consumption needs especially with