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Economy

China’s Economic Shift: How Boosting Household Income Could Fuel Growth

Ex-official Yang urges China to boost household income to drive economic growth by focusing on consumption.

byAndres Castro

September 26, 2025, 9:07 AM

Executive Summary

Yang Weimin, a former senior Chinese economic official, urged prioritizing household income growth over the next five years to boost consumption and drive economic expansion.

His remarks precede the Communist Party’s fourth plenum, where the next five-year plan, expected to focus on income growth and economic rebalancing, will be discussed.

Yang recommended increasing the share of household disposable income within national income and consumer spending’s proportion of total demand to stimulate consumption.

The Story So Far

China is currently facing weak consumer demand, which a former senior economic official, Yang Weimin, identifies as a fundamental income issue hindering future economic expansion. Ahead of the Communist Party’s Central Committee’s fourth plenum, where the next five-year plan will be discussed, there is a growing push to strategically prioritize boosting household income and consumption, along with narrowing the income gap, to drive sustainable and inclusive growth by leveraging domestic demand.

Why This Matters

The strong recommendation from a former senior Chinese economic official to prioritize boosting household income to stimulate consumption suggests a potential strategic pivot in China’s upcoming five-year economic plan. This shift, if adopted, could lead to a rebalancing of the economy towards domestic demand, addressing current weak consumer spending and income disparities, and fostering more sustainable and inclusive growth.

Who Thinks What?

Yang Weimin, a former senior Chinese economic official, believes that boosting household income over the next five years is critical for China’s future economic expansion, asserting that weak consumer demand is fundamentally an income issue.

Yang advocates for increasing the share of household disposable income within national income and boosting consumer spending’s proportion of total demand to stimulate consumption, linking future growth to “shared development,” “common prosperity,” and narrowing the income gap.

Yang Weimin, a former senior Chinese economic official, has urged the country to prioritize boosting household income over the next five years, identifying consumption as the critical engine for future economic expansion. Speaking at Tsinghua University in Beijing on Wednesday, Yang asserted that addressing weak consumer demand is fundamentally an income issue, crucial for achieving China’s next phase of growth.

Policy Context and Future Plans

Yang’s remarks come ahead of the upcoming fourth plenum of the Communist Party’s Central Committee, where members are expected to discuss the nation’s next five-year plan. This economic blueprint is anticipated to focus on income growth, gross domestic product expansion, industrial upgrading, and technological innovation.

The former official underscored that China’s future growth momentum hinges on “shared development,” the pursuit of “common prosperity,” and gradually narrowing the existing income gap. He emphasized that the primary reason for subdued consumer demand in the country is directly related to income levels.

Recommendations for Economic Strategy

To stimulate consumption, Yang specifically called for an increase in the share of household disposable income within the national income. He also advocated for boosting consumer spending’s proportion of total demand, aiming to rebalance the economy towards domestic consumption.

Yang Weimin brings significant experience to these recommendations, having played a key role in drafting multiple five-year plans during his tenure. He previously served as head of the National Development and Reform Commission’s planning department before joining the Central Leading Group on Financial and Economic Affairs in 2011.

Outlook on China’s Economic Trajectory

The emphasis on household income and consumption by a prominent former official signals a potential strategic shift in China’s economic policy direction. This approach aims to foster more sustainable and inclusive growth by leveraging domestic demand, addressing income disparities, and enhancing overall economic resilience.