DDN Business Insider | Boosting consumption set as economic focus in 2025: Expert eyes silver-haired economy potential
Editor's note: After the Central Economic Work Conference, discussions on boosting consumption and expanding domestic demand have remained hot. The meeting listed "vigorously boosting consumption, improving investment efficiency, and comprehensively expanding domestic demand" as the top priority for next year, reflecting the policymakers' deep insight into the current economic situation and forward-looking layout.
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. After the Central Economic Work Conference, discussions continue to heat up. Among the key tasks, "vigorously boosting consumption, improving investment efficiency, and comprehensively expanding domestic demand" have been identified as top priorities, which are all closely related to every ordinary citizen. To discuss these topics, we have invited Li Daxiao, former chief economist of a securities firm, and Yu Fenghui, new finance experts from Top100HKLCRC. Welcome, both!
【Anchor】The discussion about boosting consumption and expanding domestic demand has been ongoing for a long time. However, we also see that the performance of retail consumption and fixed asset investment in the mainland in November did not meet market expectations. First, I would like to ask Mr. Li how we should understand the relevant data and what problems in current domestic consumption it reflects?
The social retail sales rate in November grew by 3%, which was below expectations. However, there was a month-on-month growth of 0.16%, still showing a slight increase. Recently, we have encouraged consumption through measures like trade-ins and stimulus vouchers, particularly in transportation, electronics, and audio equipment, which saw a notable growth of 22.2%. Overall, fostering consumer spending will likely become a key focus in the future. Fixed asset investment grew by 3.3%, which is also below expectations. However, excluding real estate investment, fixed asset investment still grew by 7.4%, primarily dragged down by the poor performance of real estate investment.
Stabilizing the real estate market is indeed a priority, and next year we will continue to encourage consumption through various means to increase consumption levels. The current issues in the consumption sector are fundamentally about how we can boost expectations, stabilize employment, secure incomes, and even increase incomes and confidence. I think this is a very important aspect.
【Anchor】Yes. Regarding the underperformance of the November retail consumption data, there is a viewpoint suggesting it is related to the pre-sale period of "Double Eleven." What is your take on this, Mr. Yu?
This indeed reflects the complexity and challenges of the current domestic consumption market to a certain extent. In fact, the main challenge remains the instability of employment and the decline in income expectations. Given that consumer spending is constrained by income, and income is constrained by employment—which, in turn, is affected by economic growth, then in this stage of the economic cycle, when the macroeconomic situation is not clearly positive, it will impact employment, thereby affecting income, and ultimately constraining consumption. As for the extended pre-sale period before Double Eleven, as I have emphasized, the deeper issues lie in the slow growth of residents' income, increasing employment pressure, and deepening concerns about future economic uncertainty.
The adjustment in the real estate market certainly has some impact, but its influence on consumption is quite limited.
【Anchor】The Central Economic Work Conference emphasized implementing special actions to boost consumption, intensifying and expanding the "two new" policies, and promoting cultural tourism industry development and other measures to expand domestic demand. Do you think these measures highlighted in the conference can address the current weak domestic demand issue?
The consumption-boosting measures proposed by the Central Economic Work Conference aim to improve the consumption environment by optimizing the supply structure and increasing residents' consumption capacity. These issues are intended to be resolved, but we will need to observe the actual effects. Specifically, the government may promote high-quality products and services, reduce logistics costs—which has been emphasized multiple times—and enhance consumer protection through the integration of online and offline consumption platforms.
Additionally, measures such as tax reductions, lowering fees, increasing minimum wage standards, and boosting disposable income will be taken to stimulate consumption demand.
For these policy combinations, we still need confidence, may be on both the supply and demand sides of the law, but the legal effect is still to be observed. Of course, they are determined to solve the plight of consumers and promote the healthy development of the domestic demand market, and the key is still to increase income.
【Anchor】Good. Mr. Li, regarding the specific measures mentioned in the Central Economic Work Conference to boost consumption, to what extent do you think they will stimulate consumption?
We can still enhance the specific strategies and methods to encourage consumption. I think we can learn from Hong Kong's approach, where they issue consumption vouchers in a way that you can only receive the second batch after using the first. This approach, rather than a blanket distribution, would have a much more noticeable stimulating effect on consumption. By employing more technical means and broader coverage, I propose a method of so-called consumption vouchers, which can be used to widen its scope, which may be more obvious.
【Anchor】This year, the Central Economic Work Conference mentioned some relatively new concepts in its statements about boosting consumption, such as actively developing "first-release economy," "ice and snow economy," and "silver-haired economy." Mr. Li, could you explain these new economic models and the specific consumption potential behind them?
The specific statements include some new concepts, such as the first-release economy, ice and snow economy, and silver-haired economy. I believe these are new terminologies that can stimulate consumption in broader areas.
For instance, regarding the elderly issue, the silver-haired economy is significant because this demographic has different economic capabilities compared to previous generations. Therefore, how we can better develop and arrange the economic domain related to elderly care has substantial potential for growth.
【Anchor】The active development of new economic models such as the "first-release economy," "ice and snow economy," and "silver-haired economy" has indeed sparked a lot of anticipation for consumer sectors next year. What considerations do you think underlie the proposal of these new economic models, and what characteristics do they have? How significant is their impact on overall consumer stimulation?
The development of new economic models cannot be ignored in terms of their impact on overall consumption. The first-release economy can enhance the commercial vitality of cities by creating unique experiences and brand value, attracting more domestic tourists and investors. The ice and snow economy will increase sports, events, and leisure activities, expanding the consumption economic coverage chain, particularly in northern regions. It is important to emphasize the silver-haired economy, as China is about to enter a phase of deep aging, with a significant increase in the proportion of people aged 65 and over, which is actually a large market. There is substantial demand for elderly products, culture, sports, recreational infrastructure investment, employment, healthcare, entertainment and so on. Personally, I am very optimistic about the silver-haired economy. These emerging fields are different from each other and together constitute what we call a diversified consumption pattern, which also helps to fully activate the domestic market and achieve consumption upgrades.
【Anchor】At the same time, as Generation Z becomes the main consumer force, is the consumption market in mainland China undergoing a fundamental structural change? To better adapt to this change, Mr. Li, what adjustments do you think are needed from both policy makers and consumer companies?
Generation Z has indeed arrived, and this structural change is evident. The evolution of interests such as the secondary culture,anime, movies, and various entertainment forms is worth our research and follow up on. This significant shift in consumption patterns raises questions about how we can adapt from the production and policy sides to meet the changes of this new era. Companies that can seize opportunities by aligning with these trends will be at the forefront and will capture the attention of this era's main consumers.
【Anchor】According to data from the National Bureau of Statistics, the Generation Z group in China is approximately 264 million strong, with their consumption expenditures significantly accounting for 13% of total national household consumption, amounting to an astonishing 4 trillion yuan. Given that Generation Z is gradually rising as a dominant force in the domestic consumption market, Mr. Yu, what specific suggestions do you have for policymakers and related companies on how to effectively tap into and unleash the consumption potential of this group?
In response to the changes brought by Generation Z becoming the main consumer force, our policies should intensify support for industries like secondary culture, movies, and other entertainment, encouraging innovative creation and promoting local IPs. It's essential to build a complete industrial chain, focusing on online platforms, internet technology, and artificial intelligence. Producers need to be more sensitive to capturing young people's interests and values, developing products and services that align with their aesthetics and lifestyles. This is extremely important. Young people are the most suitable demographic for spending, so capturing their attention means that half the battle for stimulating consumption is won.
【Anchor】On another note, the consumer sectors in both the Hong Kong and A-share markets have recently performed well. Mr. Li, is this closely related to the economic work meeting's statements on boosting consumption? Considering the need to stabilize the stock market, which sectors should we pay more attention to in the future?
Looking at the consumer sectors, they have indeed performed well. I believe that in the future, sectors such as non-bank financial services, high-dividend stocks, and consumer technology could see good performance. Especially in a context where risk-free yields are significantly declining, with medium- and long-term government bond yields hitting historical lows, and where the gap between stocks and bonds is increasingly widening, the entry of medium and long-term funds, the reversal of our debt balance and residents' savings and the stock market, could all potentially give more importance to consumption, and high-quality consumer blue-chip stocks will stand out.
【Anchor】In the past month, sectors like liquor and dining have rebounded. Can this be understood as a direct response from the capital market to the central economic work meeting's emphasis on "boosting consumption and expanding domestic demand"? What are your judgments regarding the future trends of the consumer sector?
Regarding the Hong Kong and A-share markets, the recent performance of the consumer sector has indeed been bright, correlating with the central economic work meeting's focus on consumption. This reflects the market's positive response to favorable policies. In the medium to long term, as various policies gradually take effect, the consumer market is expected to maintain stable growth, especially with increasing income. I feel that the potential is still quite large. The government will continue to optimize the business environment and maintain stability in the capital market. Recently, a series of policies have been introduced to stabilize both the Hong Kong and A-share markets, especially from the central bank, which has progressively rolled out supportive measures, providing favorable expectations for investors.
The performance of the consumer sector will also need to consider macroeconomic conditions, corporate profitability, and market competition. Overall, under the support of favorable policies, the consumer sector shows good investment value and development prospects. However, I'd emphasize again that we must be alert to potential risks and fluctuations, especially geopolitical risks.
【Anchor】OK, thank you. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang, thanks for watching, and see you next time.
Anchor: Laura Cheung | Edited: Kelly Yang, Jerry Wang | Translate: Kato Ip | Proofread: Chris Liu
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