A visitor checks out an intelligent refrigerator during the 137th edition of the China Import and Export Fair in Guangzhou, Guangdong province, on April 16. AI-empowered products have shown that AI is catalyzing consumer spending and reshaping retail. [Photo/Xinhua]

Government-backed goods trade-in program helping stabilize economy

BEIJING — A Beijing resident who provided Zhang as his surname recently took delight in the purchase of a new refrigerator model that came with two helpful intelligent functions — auto-adjusting food preservation modes based on the freshness of items and notifications sent via his phone suggesting groceries that need to be stocked up in the fridge.

Zhang said the fridge is good value for the money because he bought it during the "Double 11" shopping festival, a popular Chinese online sales promotion period when steep discounts are typically offered. Other than that, Zhang also benefited from subsidies via the government-backed consumer goods trade-in program, which helped him replace the old refrigerator he had used for more than a decade.

The product Zhang purchased was recently brought up by a government official during a news briefing about the latest measures aimed at aligning production and consumer demand, so as to maximize impact in boosting consumption.

These measures, aimed at the formation of multitrillion-yuan consumption sectors in the coming years, were outlined in a detailed action plan unveiled by the Ministry of Industry and Information Technology and five other government departments on Nov 26.

He Yaqiong, an official from the MIIT, said at a news briefing on Nov 27 that AI-empowered products, such as smart refrigerators that can recommend shopping lists and AI glasses that can respond to various commands such as providing navigation services, have shown that AI is part of everyday life, catalyzing consumption spending and reshaping consumption in the world's second-largest economy.

Under the plan, China seeks to form three massive consumption sectors, namely eldercare products, intelligent connected vehicles and consumer electronics, with them reaching a market scale worth trillions of yuan by 2027. Additionally, ten 100-billion-yuan ($14.2 billion) hot spot consumer goods categories will be fostered, including goods for children and infants, smart wearables, cosmetics, fitness equipment, and pet food and products.

By coordinating the expansion of domestic demand and the deepening of supply-side structural reforms, China will ensure that supply and demand reinforce each other in a virtuous cycle and that consumption plays a steadily rising role in driving economic growth through 2030, according to the plan.

These measures closely followed the fourth plenary session of the 20th Central Committee of the Communist Party of China held in October, which adopted recommendations for formulating the 15th Five-Year Plan (2026-30).

According to the recommendations, the country will stick to the strategy of expanding domestic demand and make efforts to ensure that new demand drives new supply; that new supply helps create fresh demand; and that positive interactions are fostered between consumption and investment and between supply and demand.

Speaking about the relationship between supply and demand and their impact on the economy, MIIT Vice-Minister Xie Yuansheng said that the action plan was specifically aimed at addressing a mismatch between supply and demand in some sectors.

The core concept of the plan is to push a transition from quantity to quality in both production and consumption, enabling enterprises to shift from producing more to producing more accurately and better, in an effort to address a situation in which consumers' personalized needs are unmet while products on the market can't reach their target buyers, Xie said.

The action plan encourages enterprises to explore and produce what consumers want and prefer, so that consumers can purchase satisfactory products while enterprises' products become more marketable due to higher quality and reasonable prices, he said.

"Promoting the general alignment of supply to demand can maximize the consumption potential and facilitate smooth economic circulation," Xie said, adding that measures will be taken on five fronts to address the mismatch between supply and demand.

These include speeding up the adoption of new technologies, expanding the supply of specialty and new products, catering to the diverse needs of different population groups, nurturing new scenarios and forms of consumption, and fostering an environment conducive to boosting consumption through strengthened policy support and crackdowns on market malpractices.

Analysts hail the action plan as "targeted and thoughtful" for its focus on the needs of specific groups of people. "From senior-friendly home modifications to health products for teenagers, we can see this approach is consumer needs-oriented and more targeted, which will help unleash the consumption potential across different demographics," said Wu Yin, a professor at the Southwestern University of Finance and Economics.

Wu was optimistic that the plan, by outlining a clear transformation path for businesses' production and encouraging the supply of higher-quality products to consumers, was set to stimulate the consumer market and inject sustained momentum for high-quality economic growth.

According to Fu Yifu, a researcher at Jiangsu Su Merchants Bank, improving the alignment between consumer goods supply and demand is a strategic deployment by the country during the critical period of consumption upgrading and industrial transformation.

Fu said key sectors — including intelligent connected new energy vehicles, smart homes, consumer electronics and green building materials — are poised for expansion. Meanwhile, the fitness equipment and outdoor gear industries, as well as health-focused products such as dietary supplements and foods for special medical purposes, are also expected to see rising consumption demand.