Domestic demand has become a key focus for the international community when observing China's economy. In 2025, as China continued steady progress in expanding domestic demand, its total retail sales of consumer goods surpassed 50 trillion yuan ($7.17 trillion) for the first time, showcasing the vast opportunities and potential of China's market to the world.

Expanding domestic demand is both a necessary step and an inevitable trend. A defining feature of major economies is that domestic demand leads and the economy circulates internally. Building a comprehensive domestic demand system and a robust domestic market helps address real development challenges and better cope with external uncertainties.

Domestic demand has gradually become the primary driver and stabilizing anchor of China's economic growth. From 2013 to 2024, domestic demand accounted for an average of 93.1 percent of China's economic growth. In 2025, final consumption expenditure accounted for 52 percent of economic growth, surpassing the 50 percent mark and increasing by 5 percentage points from the previous year.

More broadly, China's consumption is shifting toward innovation and structural optimization. In 2025, service consumption accounted for 46.1 percent of per capita consumer spending. E-commerce, livestream commerce, and online entertainment have driven rapid growth in online consumption. At the same time, the ice-and-snow economy, first-mover economy and silver economy continue to gain momentum as new growth drivers.

European news platform Modern Diplomacy noted that, as China promotes a development model driven by domestic demand, led by consumption and fueled by endogenous growth, its economy is expected to achieve notable growth in 2026 across high technology, intelligent manufacturing, green energy and service consumption.

Addressing challenges is also part of building growth momentum. In recent years, while some international voices have hyped the so-called "imbalance" narrative about China's economy, they have overlooked that issues like strong supply paired with relatively subdued demand are merely "growing pains" — challenges that can be resolved through determined and sustained efforts.

China's mega market is multi-tiered and rich in potential. There is vast room for investment in new urbanization, science and technology industries, and improvements in people's livelihoods.

Currently, China's household consumption rate is about 40 percent, leaving room for a 10 to 20 percentage point increase compared with developed economies. Concurrently, per capita infrastructure stock could grow by four to five times relative to advanced economies.

With more targeted and coordinated policy efforts, domestic demand's potential will continue to be unleashed. In 2025, the consumer goods trade-in program benefited over 360 million people, reflecting both market scale and policy effectiveness.

To address the rare occurrence of negative investment growth in recent years, China has promptly introduced targeted measures, including refining the implementation of major national projects and key security-capacity initiatives, while effectively stimulating private investment vitality.

An international scholar observing China's development noted that China approaches difficulties with a rational, pragmatic attitude and addresses challenges through its institutional strengths and policy tools — an important sign of China's economic resilience. The Financial Times even published an article titled "Don't Underestimate the Chinese Consumer."

China's unwavering commitment to expanding domestic demand will create upgraded opportunities for global cooperation. Over the past five years, China has imported more than $15 trillion in goods and services. China is now the world's second-largest consumer market and has already become the largest in multiple segments, including automobiles, mobile phones and home appliances.

As China enters its 15th Five-Year Plan period (2026-2030), steadily rising household incomes and growing demand for a better life will spur new consumption and drive new supply. As China accelerates the transformation of its development model, optimizes its economic structure and shifts growth drivers, new investment momentum will continue to emerge, with ample space for both investment in physical assets and in people.

In this process, China is willing not only to be the "world's factory," but also the "world's market," accelerating its transition from a major manufacturing country to a major consumer country. This will inject strong, new momentum into mutually beneficial, win-win cooperation between China and the rest of the world.

To understand China's economy, one needs to take a longer view. A China with surging domestic demand will have a stronger economic foundation and more abundant endogenous momentum, and, through its own high-quality, sustainable development, will inject greater certainty into global growth and open up new opportunities.