China's Consumer-Centered Approach, Sustaining Growth in a New Era
By Kirtan Bhana - TDS/BFM

17 March 2025

China’s meteoric rise as a global power over the past few decades is a testament to the country’s unique blend of governance, economic policy, and social focus. As the world watches the dawn of a new era for China, the significance of the country's people-centred approach cannot be overstated. At the heart of this model is the system of governance encapsulated by the annual Two Sessions (Lianghui), where delegates from all walks of life come together to debate, plan, and implement the country’s five-year plans. These gatherings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) serve not just as legislative functions but as vital expressions of China’s democratic focus—rooted in its commitment to its people.

In 2025, China marks the final year of its 14th Five-Year Plan, a blueprint that was adopted by the Communist Party of China (CPC) to guide the nation’s development. This moment serves as an important juncture, reflecting on the country’s impressive progress and shaping its path forward as it navigates the complexities of a rapidly changing global landscape. The focus of the Two Sessions this year that has increasingly taken centre stage is the consumer. In a world where global supply chains are often dictated by macroeconomic forces and trade wars, China’s approach to consumer-centred economics has become both a model and a point of introspection.

People-Centred Governance: A Fundamental Principle
The essence of China's governance model is a people-centred approach, where the needs of the people are prioritized in decision-making. Unlike many Western political systems, which often emphasize government-centred or top-down models, China’s system ensures that legislative processes are grounded in grassroots feedback. The Two Sessions are a primary example of this. Through the NPC and CPPCC, representatives from China’s vast population—including workers, intellectuals, entrepreneurs, and ethnic minorities—gather annually to engage in discussions that shape national policy. These delegates are entrusted with presenting the voices of the people, ensuring that policies are responsive to the needs of the population.

This mechanism of deliberation and consensus-building allows the government to make informed decisions that reflect the diversity of the country’s population. It also ensures that the nation's trajectory is shaped by collective input, creating a system of governance that encourages cooperation and integration at every level. These gatherings are a fundamental aspect of how China’s democracy works, driving forward decisions that directly impact the lives of millions. Whether in terms of infrastructure development, social welfare, or economic growth, the aim is always to serve the people.

Consumer-Centred Economics: A Focus on Domestic Demand
This year’s Two Sessions took a significant step toward addressing one of the most pressing issues facing China today: sluggish domestic demand. For years, China’s economy has been driven by massive exports, infrastructural growth, and an emphasis on heavy industry. However, as global economic shifts occur, such as trade tensions and geopolitical changes, China has recognized the need to bolster its internal consumer market.

A noteworthy aspect of the 2025 deliberations was the focus on domestic consumption as a pillar of economic growth. The country’s consumer market, once limited by a thrifty and prudent populace, is now central to sustaining long-term growth. The government has acknowledged that financialization and excessive credit, particularly in the real estate sector, have led to imbalances in the economy. As a result, policies have been put in place to stimulate demand, encourage spending, and make the consumer the central focus of economic development.

The role of the consumer as a driver of economic activity cannot be understated. China’s 1.4 billion-strong population represents a vast and diverse consumer base, one that has the potential to reshape the global economy. As disposable incomes rise and consumer confidence improves, domestic consumption is set to be a critical engine for continued economic success. In fact, recent measures have focused on enhancing financial literacy, ensuring that consumers have access to fair credit options, and protecting them from the risks of speculative bubbles that can undermine economic stability.

Supporting Private Enterprise and Entrepreneurship
As China strives for a more balanced and sustainable economic model, support for private enterprises and entrepreneurship has been a key focus in this year’s sessions. The Chinese government has long been supportive of the state-owned enterprise sector, but in recent years, it has increasingly recognized the importance of a vibrant private sector. The government has moved to reduce bureaucratic barriers, streamline regulations, and foster an environment conducive to innovation and entrepreneurship.

This shift is particularly important as China transitions into an era of high-quality development. The private sector is expected to play a central role in driving technological innovation, creating jobs, and providing goods and services that meet the evolving demands of Chinese consumers. With the government’s backing, entrepreneurs are empowered to innovate, invest in emerging sectors such as artificial intelligence, clean energy, and high-tech manufacturing, and contribute to the nation's modernization.

Sustainable Growth and High-Quality Development
In tandem with the emphasis on domestic consumption and entrepreneurship, China’s leadership has been keen to pursue high-quality development—an approach that integrates sustainability, innovation, and inclusivity. Over the past year, China’s economy has continued to grow at a steady pace, with GDP expanding by 5% and significant advancements in industries such as renewable energy, high-tech manufacturing, and information technology. The focus on quality over quantity in economic growth is crucial as China shifts its focus from rapid expansion to sustained and balanced development.

This shift is evident in the nation’s growing commitment to environmental sustainability. Policies aimed at reducing carbon emissions, improving air quality, and expanding renewable energy sources have been central to China’s strategy. In 2024, for example, China’s energy consumption per unit of GDP dropped by more than 3%, while the installed capacity for renewable energy grew by an impressive 370 million kilowatts.

China’s New Era: Preparing for the Future
As China continues its path toward modernization, the role of the CPC and its leadership will remain central. The strong, centralized leadership of the Party, with Xi Jinping at its core, ensures that the country remains on course toward achieving its long-term goals. The success of the people-centred governance model, as demonstrated by the Two Sessions, is key to understanding why China has been able to achieve such extraordinary growth.

The country’s transformation is not just about economic power; it is about the empowerment of its people. As China moves forward into a new era, the lessons learned from the Two Sessions will guide the country in building a society that is not only prosperous but also fair, sustainable, and inclusive. With a continued focus on consumer demand, private enterprise, and high-quality development, China is positioning itself for an even more influential role in the global order.

China’s rise as a global leader is due in large part to its commitment to people-centred governance and consumer-centred economics. The annual Two Sessions serve as a vital reflection of this approach, ensuring that China’s development remains in tune with the needs of its people. As the country enters a new phase of transformation, it is poised to continue its ascent, leveraging innovation, sustainability, and consumer power to drive progress in the years to come.