Lu said his team expects Chinese policymakers to consider an increase in spending on social security for lower-income households. “We especially expect Beijing to significantly increase payments to those rural pensioners (55 percent of total pensioners) whose average monthly pension income is only 225 yuan. Beijing may also waive part of the annual 400-yuan fee on basic medical insurance for low-income individuals,“ he said.

　　Considering the pent-up demand for the consumer goods trade-in program, Lu said his team expects the official manufacturing purchasing managers index to rebound to 50.2 in February from 49.1 in January. He estimates that the official nonmanufacturing PMI will increase to 50.5 in February from 50.2 in January, supported by travel and entertainment demand during the Spring Festival holiday.

　　Vibrant consumer spending data stemming from the 2025 Spring Festival holiday confirm a strong start to the year for the world's second-largest economy.

　　Domestic travel spending during the holiday reached 677 billion yuan, posting a 7 percent increase from the same period last year, according to data from the Ministry of Culture and Tourism.

　　Spring Festival box office revenue also enjoyed a positive run, soaring to 9.51 billion yuan — a record high. The animated blockbuster Ne Zha 2 was the star of the show as it became the first Chinese film to gross over 14 billion yuan and secure its place in the top 10 global box office rankings.

　　Joe Ngai, chairman of management consultancy McKinsey China, said that China's economic future will be shaped by its ability to boost domestic consumption, which he described as “underdeveloped“ but possessing significant potential.

　　“Consumption demand is actually in the bank,“ Ngai said, explaining that Chinese households have saved up in recent years, creating a reservoir of demand waiting to be unleashed.