Seven ministries launch joint plan to drive retail industry upgrade amid efforts to boost consumption

China launched a joint plan on Monday to drive retail industry innovation upgrade in the latest efforts to boost domestic consumption, according to a notice released on the official website of China's Ministry of Commerce (MOFCOM).

The plan, rolled out by seven ministries including MOFCOM, National Development and Reform Commission, and Ministry of Culture and Tourism, vows to improve the long-term mechanism for consumption expansion among other mechanisms, according to the notice.

According to the plan, the nation will initially establish a modern retail system by 2029, featuring rich supply, balanced distribution, diverse channels, high-quality services, smart convenience, and low carbon emissions.

To achieve this goal, efforts will be made including designating a group of pilot cities for retail innovation upgrades each year, renovating a number of existing retail facilities, and promoting a selection of well-established successful cases, it said.

The release of this notice reflects the country's current rising focus on consumption, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday, adding that promoting consumption growth has been a long-standing effort, and "now the aim is to continue driving it effectively."

"This time, the focus is on strengthening and improving areas that have been relatively weak in the past, such as innovation," Zhou noted.

Monday's plan consists of five areas to boost the retail sector, including promoting scenario-based transformations such as developing the "first-release economy."

Additionally, the plan includes enhancing quality supply by focusing on the consumer-oriented product offerings, and improving service experiences. Other key areas for retail development include driving digital empowerment, fostering diversified innovation, and upgrading the supply chain.

An official with MOFCOM said on Monday that the retail industry is crucial to the nation's economy and people's livelihoods, stressing that the retail industry is a key link in the trade and circulation system.

The plan is made with an effort to thoroughly implement the spirit of top meetings such as the Central Economic Work Conference held last week that chart the course for the nation's economic development.

Zhou said that the plan comes at a critical moment and sends a strong signal to the market that "China intends to treat consumption stimulation as a systemic policy, promoting coordination among various related policies to create a unified force."

In recent years, the overall development of China's retail industry has remained positive, with a steady growth in scale. From 2021 to 2023, the annual year-on-year growth rate of total retail sales of consumer goods was 6.0 percent, according to the MOFCOM.

The latest data released by the National Bureau of Statistics on Monday also shows a continuous positive trend, with the total retail sales of consumer goods reaching 44.27 trillion yuan ($6.08 trillion), a year-on-year increase of 3.5 percent in the first 11 months of 2024.

Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Monday that the plan provides clear direction for the future development of the retail industry.

In the future, more policies are needed to support the development of the retail sector, such as tax incentives and special subsidies, to create a better environment for retail businesses to thrive, Wang said.

"With government guidance and support, retail businesses should actively respond to challenges such as weak consumption, and achieve high-quality development through innovation and transformation," Wang added.