Interpreting the "15th Five-Year Plan" Outline | Expert Interview with Hong Tao: Building Foundation of Consumer Capacity Through "Investment in People" and Suggesting Shorter Working Days to Unlock New Consumer Potential

Recently, the “Outline of the 14th Five-Year Plan for National Economic and Social Development of the People’s Republic of China” (hereinafter referred to as the “Outline”) was released, outlining China’s economic development blueprint for the next five years.

Focusing on boosting consumption, the “Outline” addresses four key areas: strengthening the foundation of household consumption, releasing the potential of service consumption, expanding and upgrading commodity consumption, and continuously improving the consumption environment, each with specific requirements.

The “Outline” states that efforts should be made to coordinate employment promotion, income increase, and expectation stabilization, and to accelerate the formation of a long-term mechanism for expanding household consumption. It emphasizes stabilizing and expanding employment capacity, supporting stable jobs and new employment opportunities for individuals, actively cultivating new professions and positions, and exploring new employment spaces in digital economy, green economy, and silver economy.

How can a long-term mechanism for expanding household consumption be established? How should the minimum wage standards be steadily increased, and how can different regions coordinate these increases? What signals are released by adjusting the minimum living standard in relation to per capita consumption expenditure? What key obstacles must be addressed to continuously improve the consumption environment?

Focusing on these issues, China Business News (NBD) interviewed Hong Tao, Vice Chairman of the China Consumption Economics Society and Director of the Beijing University of Business and Economics Institute of Commercial Economics.

Increasing the Minimum Wage Standards Should Grant More Autonomy to Local Governments

NBD: The “Outline” proposes to establish a long-term mechanism for expanding household consumption. How can this be achieved? What obstacles need to be overcome?

Hong Tao: The 20th CPC Central Committee’s Fourth Plenary Session proposed “leading new supply with new demand, and creating new demand through new supply.” Therefore, we need to “invest in people” to solidify the foundation of consumption capacity and connect “employment and income growth” with “expanding consumption.”

To address the obstacles faced by consumption upgrading, policies must focus on improving people’s livelihoods to build a sustainable consumption mechanism. Key issues include motivation to consume, income levels, confidence to spend without worries, willingness driven by interest, psychological, aesthetic, behavioral, and legal factors, as well as having sufficient disposable income and health to spend.

NBD: As you mentioned, the “Outline” states that the minimum wage should be steadily increased. Can this effectively stimulate consumption? How much room is there for different regions to raise minimum wages?

Hong Tao: I believe that economic development levels vary across regions, and income levels differ accordingly. Therefore, the scope for increasing minimum wages should be given more autonomy to local governments, rather than a one-size-fits-all national standard. Each region should determine its minimum wage based on its economic development and fiscal situation.

In addition to raising minimum wages, income can also be increased by adjusting working days. Drawing from international experience, we could extend weekends from 2 days to 2.5 days, or even shift to a 4-day workweek. This means reducing working days without changing wages, giving residents more free time and satisfaction. This approach can boost consumption and indirectly increase income levels—since workers work fewer days but still earn the same.

Services related to artificial intelligence are becoming a new direction for expanding employment

NBD: The “14th Five-Year Plan” mentions “continuously expanding the middle-income group,” while the “15th Five-Year Plan” focuses more on increasing income for urban and rural residents. How do you view this difference?

Hong Tao: I think the wording in the “15th Five-Year Plan” is more aligned with reality and the development philosophy of socialism with Chinese characteristics. It emphasizes considering the interests and needs of consumers across all social strata, not just a small segment.

Chinese modernization aims not only to expand the middle-income group but also to build a multi-layered, multi-criteria, diversified consumption pattern. This includes high-end and ordinary consumption, personalized and mass consumption. Therefore, focusing on increasing income for urban and rural residents in the “15th Five-Year Plan” can better stimulate consumption potential across a broader range, embodying the development concept of “investing in both goods and people.”

NBD: The “Outline” mentions establishing a dynamic adjustment mechanism for low-income standards linked to per capita consumption expenditure. What signals does this send?

Hong Tao: It signals that the government is increasingly attentive to the living conditions of low-income groups and their consumption levels. Linking the minimum living standard to residents’ per capita consumption expenditure through a scientific and stable quantification method ensures that the standard keeps pace with economic and social development, better safeguarding the basic living needs of low-income populations.

In 2020, China successfully completed its poverty alleviation goals. Since 2021, we have embarked on a new journey to build a modern socialist country. During the “14th Five-Year Plan” period, our main task is to consolidate and expand the achievements of poverty alleviation. Looking ahead to the “15th Five-Year Plan,” we aim not only to maintain these results but also to ensure that income levels of low-income groups rise in tandem with social and economic development. Therefore, adjusting the minimum living standard in relation to per capita consumption expenditure further clarifies standards and objectives.

NBD: Regarding increasing income and stabilizing expectations, the “Outline” proposes to stabilize and expand employment capacity. With the rapid development of artificial intelligence, where are the new opportunities for job stability and expansion?

Hong Tao: The rapid development of AI worldwide is an irreversible trend, but AI is ultimately a product of human technological innovation. Its purpose is to replace heavy, repetitive work, thereby reducing labor intensity.

We should not fear AI; instead, we should see it as a way to lighten workers’ burdens and improve efficiency. For example, as I mentioned earlier, reducing workdays can stimulate consumption, and AI can help accomplish this.

As AI advances, many production and circulation activities will rely on AI technology. This will create more service jobs related to AI, becoming a new avenue for employment expansion. Of course, the key is having the right talent to meet these new job requirements. Moving forward, there needs to be coordinated development in science, education, and talent cultivation to achieve more precise matching between jobs and workers.