County-level consumption prioritized

China has unveiled a package of measures to unlock the potential of lower-tier, smaller-scale urban markets, with a particular focus on county-level spending, as counties emerge as an increasingly important driver of consumption growth, officials and experts said.

The latest push is expected to tap a deeper reservoir of domestic demand and lend fresh impetus to the building of a strong domestic market, thereby reinforcing China's longer-term transition toward consumption-led growth, they added.

"County and township markets now hold the key to further consumption growth," Yuan Xiaoming, assistant minister of commerce, said at a news conference in Beijing on Tuesday, noting that county-level areas account for about 40 percent of China's economic output.

Their comments came after the Ministry of Commerce and eight other government departments released the guideline earlier that day, setting out 18 measures covering upgrades to retail infrastructure, business format innovation, the supply of goods and services, distribution networks and financial support.

Under the guideline, efforts will focus on improving the retail environment in county-level areas by upgrading existing commercial facilities and retail networks, strengthening support services and making better use of idle assets, the ministry said.

Dai Mingfeng, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said: "County-level consumption is undergoing a structural shift, with consumers increasingly trading up and devoting a growing share of their spending to services.

"Young people returning home are playing a dual role — starting businesses that broaden local supply while generating fresh demand as consumers," Dai said. "They are a small but pivotal force driving consumption growth in counties."

To better meet evolving demand, the measures will encourage chain operators to accelerate their expansion into county-level markets, help local brands blend heritage with innovation and support localities in developing new business formats suited to their own conditions, the ministry said.

Retailers are increasingly looking to counties for growth. Busy Ming Group Co, a snack and beverage retailer, said in its 2025 annual results announcement that around 60 percent of its 21,948 stores were located in counties and townships at the end of 2025. Its network reached 1,401 counties, or around 75 percent of the national total.

The guideline also promotes emerging business formats tailored to local conditions and closer integration of commerce with agriculture, culture, tourism and sports, said the ministry.

New travel hot spots are emerging beyond major cities. China's "hidden-gem small cities" posted the strongest booking growth this summer, with hotel bookings in Zherong county, Fujian province — about a three-hour drive north of Fuzhou — surging more than tenfold from a year earlier, said online travel portal Qunar.

In addition, the measures call for stronger fiscal and financial support. Eligible personal loans for consumption and business loans in the services sector will qualify for interest subsidies, while retail businesses opening new chain stores in counties may apply for government-backed startup loans and receive interest subsidies, the guideline stated.

The measures come as lower-tier markets take up a growing share of consumer spending. Retail sales of consumer goods in county and township markets accounted for 39.1 percent of the national total in the first seven months, up 0.3 percentage point from a year earlier, according to estimates released by the National Bureau of Statistics on Monday.

Bai Wenxi, vice-chairman of the China Enterprise Capital Union, said China's consumption growth over the next decade will be driven largely by county-level markets.

"Supportive policies have already created favorable conditions, but the ultimate outcome will hinge on the quality of local implementation and whether businesses are prepared to make a long-term commitment to these markets," Bai said.

zhangchenxu@chinadaily.com.cn