(Yicai) June 23 -- Experts predict that China’s foreign trade environment will remain uncertain this year, urging the country to expand its policy toolkit and focus more on stimulating domestic demand.

Efforts should be directed toward increasing the share of fiscal expenditure allocated to public services and people’s livelihoods, raising household consumption as a proportion of total demand, and boosting residents’ disposable income relative to the national economy, Wang Yiming, vice chairman of the China Center for International Economic Exchanges, said at the recent China Macroeconomy Forum.

International financial institutions, including Goldman Sachs and JPMorgan, have recently raised their 2025 economic growth forecasts for China. They highlighted the country's technology and consumer sectors as areas with significant growth potential, increasingly attracting global capital.

Wang emphasized that expanding domestic demand requires not only policy support but also deeper reforms. He suggested accelerating fiscal and tax reforms to shift local governments’ investment-first mindset toward one that better supports consumption. His recommendations also included linking wages more closely to prices, moderately relaxing price controls to stimulate income growth, and introducing incentives to improve public services for rural migrants living in cities.

Given China’s long working hours, limited holidays, and the economy's transition from supply-side shortages to demand-side weaknesses, improving holiday arrangements could help revive service consumption, said Luo Zhiheng, chief economist at Yuekai Securities. He proposed adding more holidays in the second half of the year, adjusting holiday scheduling rules, and improving the implementation of paid leave systems.

Salaries currently account for just 55 to 57 percent of Chinese residents’ disposable income, Teng Tai, director of the Wanbo New Economic Research Institute, told Yicai. To achieve sustainable income growth, he recommended reducing personal income taxes and advancing the healthy development of capital markets to enhance property income.

China is also working to unlock the potential of service consumption. In April, nine government departments, including the commerce ministry, jointly introduced 48 measures to promote consumption in sectors such as catering, tourism, sports events, and emerging business models.

At the forum, Huang Qifan, former mayor of Chongqing, suggested that during the upcoming 15th Five-Year Plan period (2026–2030), China should prioritize the development of production service industries and foster leading enterprises within the industrial ecosystems of key firms like Huawei and Apple.

Editor: Emmi Laine