Consumer growth depends on new scenarios, new audiences, and new infrastructure

Author: Sun Lijian

Editor: Hong Xiaowen

2026 is the first year of the “14th Five-Year Plan.” The government work report places “focusing on building a strong domestic market” as the top priority for the year, clearly stating “stimulating residents’ endogenous consumption motivation and promoting consumption policies simultaneously.” This indicates a shift in the approach to boosting consumption: from short-term stimulus to constructing a comprehensive, dynamic, and cyclical endogenous growth ecosystem centered on “new infrastructure—new scenarios—new demographics.” The new growth points for consumption are deeply rooted in this systemic and profound transformation.

Sun Lijian (Director of the Fudan University Financial Research Center, Professor and PhD Supervisor at the Fudan University Institute of World Economics)

New Scenarios: Creating New Demand Through High-Quality Supply

Currently, one of China’s economic challenges is “strong supply but weak demand”—a coexistence of traditional excess supply and unmet high-quality, personalized demands. The solution lies in leading and creating new demand through innovative supply. The report calls for “developing new quality productivity according to local conditions,” with consumption focusing on fostering a series of new scenarios that reshape lifestyles and create entirely new experiences. Three promising areas are smart technology, low-altitude economy, and the silver-haired (elderly) market.

First, from the perspective of the smart economy, AI is evolving from a “tool” to a “partner,” reconstructing the life service chain. The government work report proposes “accelerating the promotion of next-generation smart terminals and intelligent agents” and “deepening and expanding ‘AI+’.” This signifies AI’s evolution from an “assistant” to an “intelligent agent” deeply embedded throughout the entire consumption process.

In this context, on one hand, hardware proliferation is creating new consumption entry points. A 250 billion yuan government bond policy for replacing old devices will accelerate the adoption of AI smartphones, AI PCs, and intelligent connected vehicles. These devices, equipped with perception and decision-making capabilities, will generate new scenarios such as cross-border travel, personal health management, and in-car “third spaces” for work and entertainment. On the other hand, intelligent agents will reshape service provision. AI agents capable of understanding complex intentions and utilizing multiple tools will revolutionize the shift from “people seeking services” to “services seeking people.” Tasks like ordering food, hailing rides, and making appointments could be handled by AI, leading to a transition toward one-stop subscription-based, scenario-integrated life services—especially benefiting cultural tourism, healthcare, and other service consumption sectors.

Second, the low-altitude economy is opening up the “ceiling” of ground-based consumption and expanding into three-dimensional space. The government work report lists the low-altitude economy as one of the emerging pillar industries, with significance beyond logistics. It is pushing consumption scenarios from two-dimensional to three-dimensional. For example, solving the “last mile” problem in mountainous, island, and emergency medical scenarios enables “minute-level” delivery, activating e-commerce, fresh produce, and pharmaceutical consumption in specific areas, creating previously nonexistent demand. Additionally, aerial tourism generates new experiences; eVTOLs and helicopter sightseeing turn natural landscapes into paid aerial experiences, driving spending on scenic tickets, cultural products, and high-end accommodations. This requires building networks of takeoff and landing points and low-altitude air routes, which themselves constitute new infrastructure for consumption.

Third, the silver-haired (elderly) and health economy focus on shifting from “being cared for” to “active consumption,” activating a blue ocean of services. On one hand, expanding “elderly” scenarios—implementing subsidies for moderate to severely disabled seniors’ care, increasing pensions, and expanding long-term care insurance (already covering 300 million people)—reduces the preventive savings and care costs for the elderly, channeling their consumption capacity into senior tourism, smart aging homes, and health management. On the other hand, improving “small” scenarios—such as free education for the first year of preschool, comprehensive parenting subsidies, and inclusive childcare support—significantly eases young families’ burdens. These policies stimulate spending on maternal and infant products and release parents’ time and energy, encouraging participation in cultural tourism, fitness, and other developmental consumption.

New Demographics: Precise Empowerment of Potential Mainstays

The fundamental driver of consumption growth is people. Policies should tilt resources toward groups with the greatest consumption potential but the most constraints. The core logic is to reduce preventive savings through institutional arrangements, increase marginal consumption propensity, and transform latent demand into effective demand.

First, for the “elderly” and “young” groups, it is essential to address their major concerns and unleash rigid consumption potential. For the elderly: raising pensions, expanding long-term care insurance, and building community elderly care networks create a “secure income and care” safety net. This alleviates worries about medical care and disability, encouraging them to spend savings on quality life activities like travel, health maintenance, and socializing. Data shows that long-term care insurance covers 300 million people, and nursing beds in elderly care facilities will reach 73%, meaning hundreds of millions of seniors will be included in service consumption coverage.

For the young: policies such as “free education for the first year of preschool,” “comprehensive parenting subsidies,” “inclusive childcare,” and “housing support for multi-child families” form a full-chain cost-sharing mechanism. This eases educational and housing burdens, boosting confidence and capacity for long-term consumption planning (e.g., buying cars, upgrading homes, traveling). The spending released by these policies directly connects to new scenarios like smart maternal-infant products, family tourism, and education services.

Second, for low-income groups and new employment workers, it is vital to strengthen income growth foundations and broaden consumption boundaries. The government work report emphasizes “formulating and implementing urban and rural residents’ income-increasing plans” and prioritizes “promoting income growth for low-income groups.” Income growth is the foundation of consumption; improving wage and social security systems and increasing residents’ property income can help more workers share economic growth benefits.

Meanwhile, ensuring stability for new employment forms is crucial. The report states that “carefully expanding pilot programs for occupational injury insurance” will help address concerns of about 13 million gig workers, such as food delivery riders and ride-hailing drivers, stabilizing their income expectations and making them stable providers and consumers of services—forming a virtuous cycle of “employment—income—consumption.” They are the core users and supporters of new scenarios like instant retail, intelligent terminals, and local life services.

Investments in education, healthcare, elderly care, and housing—funded with real resources—will significantly boost residents’ willingness to consume. Precise empowerment of key groups essentially reshapes the “population base” of consumption, providing the deepest soil for sustainable growth.

New Infrastructure: Building the Digital Foundation for New Consumption Growth

The implementation of new scenarios and coverage of new demographics rely on new infrastructure. The government work report’s deployment of “new infrastructure” indicates that a three-dimensional, intelligent infrastructure system—centered on “digital—low-altitude—data”—is taking shape.

First, digital and intelligent infrastructure serve as the “computing power engine” and “data fuel” for consumption. The report proposes “large-scale intelligent computing clusters, collaborative computing, and other new infrastructure projects” alongside “deepening data resource development and utilization,” forming the core base for smart consumption. Powerful, inclusive AI computing capabilities are prerequisites for widespread AI applications. They provide cloud-based “brains” for AI smartphones, smart homes, and autonomous vehicles, ensuring smooth experiences anywhere. The report also calls for “building high-quality data sets” and “improving data element infrastructure,” which means promoting orderly opening of public and industry data to develop precise, personalized AI consumption applications (like personalized travel planning and targeted health management), accelerating the blossoming of “AI+ consumption” scenarios.

Second, low-altitude infrastructure is constructing a “route network” and “regulatory system” for three-dimensional consumption. Scaling low-altitude consumption depends on safe, efficient, and convenient aerial infrastructure and regulatory rules. Physical facilities like takeoff/landing points, charging stations, and low-altitude intelligent control platforms are the “airports” and “service stations” enabling logistics, aerial tourism, and other scenarios. Meanwhile, soft rules and platforms—such as the “Interim Regulations on Unmanned Aerial Vehicle Flight Management” and pilot programs for “low-altitude airspace coordination”—are establishing unified standards for airspace division, flight approval platforms, and emergency response systems. This forms a “digital traffic law” for safe, orderly, and predictable low-altitude consumption, building consumer confidence.

Third, traditional infrastructure is upgrading toward “consumption-oriented” development. Major transportation hubs and energy bases, once completed, improve logistics efficiency and energy stability, laying the foundation for regional consumption prosperity. For example, efficient cold chain logistics facilities directly support the explosive growth of fresh e-commerce and pre-made dishes.

The government work report shows that by 2025, the added value of core digital economy industries exceeded 10.5% of GDP, aiming for 12.5% by the end of the “14th Five-Year Plan.” Achieving this depends on annual digital infrastructure investments worth hundreds of billions. Similarly, the low-altitude economy aims to “form trillion-level industrial clusters,” with infrastructure like takeoff/landing points, routes, and air traffic control platforms as prerequisites. This reflects the policy logic of “building water sources (technology/scenarios) first, then channels (infrastructure), to eventually flow into consumption.” Without new infrastructure, new scenarios are castles in the air; investments in infrastructure are essential to systematically reduce institutional transaction costs and physical accessibility costs of new consumption.

Driving Endogenous Consumption Growth Through Systemic Reformation

The consumption growth path outlined in the 2026 government work report represents a profound paradigm shift. It does not rely on short-term, universal stimulus but aims to build an endogenous growth ecosystem where “new infrastructure—new scenarios—new demographics” mutually reinforce and cycle positively:

• New infrastructure (the soil and framework) provides the underlying support for innovative supply and inclusive services through digital, low-altitude, and data infrastructure, reducing spatial, temporal, and informational barriers to consumption.

• New scenarios (the fruit and presentation) leverage infrastructure and technological innovation to create intelligent, green, and experiential products and services, proactively generating and leading demand to address the “strong supply but weak demand” challenge.

• New demographics (the roots and engines) focus on “investing in people” through livelihood projects, precisely enhancing the consumption capacity and willingness of potential mainstays like “elderly” and “young” groups, transforming policy dividends into tangible market demand.

These three dimensions are closely interconnected and mutually empowering: powerful computing (new infrastructure) supports AI health assistants (new scenarios), which serve elderly individuals needing health management (new demographics); low-altitude routes (new infrastructure) make mountain fresh delivery (new scenarios) possible, enabling residents there to shop conveniently (new demographics); parenting subsidies (new demographic policy) release family spending capacity, which is perfectly matched by smart maternal-infant products and inclusive childcare services (new scenarios).

Ultimately, in the first year of the “14th Five-Year Plan,” this system will promote “steady macroeconomic” and “facilitate transformation,” solidifying the foundation for China’s modernization. It sends a clear signal: China’s consumption potential does not lie in simply “printing money to boost spending,” but in systemic innovation through institutional reform, technological empowerment, and social security—systematically activating people, empowering goods, and transforming spaces—thus opening a more resilient, sustainable, and high-quality path for consumption growth. The new growth points for consumption are embedded in this profound, systemic transformation and upgrade.