(Yicai) April 23 -- Chinese residents’ income growth slowed in the first quarter, even as the country’s economy expanded by a better-than-expected 5 percent. This underscores the growing need for the rapid formulation and implementation of measures to boost incomes for both urban and rural residents, experts said.

Per capita disposable income nationwide reached CNY12,782 (USD1,870) in the first three months, according to data recently released by the National Bureau of Statistics. This represents nominal growth of 4.9 percent year on year and real growth of 4 percent after adjusting for inflation. The nominal growth rate was 0.1 percentage point lower than the full-year figure for 2025 and the real growth rate dipped 1 percentage point.

Household income growth remains out of sync with the broader economic recovery, Zhang Jun, chief economist at China Galaxy Securities, told Yicai. Low and middle-income groups, which have a higher propensity to consume, have seen relatively slow income growth while precautionary saving remains elevated.

The policy positioning of the income growth plan has evolved into a medium-term institutional arrangement aimed at expanding the middle-income group and strengthening domestic demand, Zhang said.

Key measures are expected to include safeguarding remuneration for migrant workers and flexible employment groups, improving the social security system, raising basic pensions and minimum living standards and reducing the financial pressures of education, healthcare and elderly care, so as to unlock consumption potential, he added.

At a critical stage in the transition from high-speed to high-quality economic development, and amid a complex external environment and deepening internal structural adjustments, promoting income growth for urban and rural residents should be treated as a strategic priority, said Huang Yanfen, professor at Renmin University of China's School of Public Administration and Policy. This approach is essential for addressing unbalanced and inadequate development, fostering a new development pattern and reshaping growth drivers and is a concrete step toward advancing common prosperity within the framework of high-quality development.

The implementation of such a plan should focus on key dimensions such as expanding employment, broadening income channels, strengthening social protection, targeting priority groups and integrating income growth with consumption, Huang Yanfen said. A coordinated, multi-dimensional long-term mechanism is needed to ensure effective policy outcomes.

The early introduction of an income growth plan for urban and rural residents would have a positive impact on domestic consumption, said Huang Qunhui, researcher at the Chinese Academy of Social Sciences’ Institute of Economics. Consumer behavior is driven more by expectations of future income rather than current income levels. Therefore, if an income growth plan for residents is introduced, it would help improve expectations for future income, thereby effectively spurring consumption.

Expanding diversified income channels is also a key step to optimize income structure. The relatively low share of household income in the economy is partly due to insufficient property income, said Luo Zhiheng, chief economist at Yuekai Securities. Increasing property-related income through multiple channels would therefore be significant for overall income growth.

Against the backdrop of a subdued real estate market, the capital market is expected to play a more prominent role in boosting residents' property income. The National Development and Reform Commission's 2026 National Economic and Social Development Plan proposes encouraging listed companies to increase cash dividends and conduct share buybacks, thereby enhancing household investment income.

Editor: Kim Taylor