China moves to boost county-level consumption, domestic demand

China on Tuesday unveiled a set of measures to unlock the consumption potential of counties and smaller cities, tapping into the vast lower-tier markets as a new source of domestic demand and economic growth.

The government calls for upgrading consumption channels in counties, including renovating township commercial centers, rural markets and local fairs, encourages domestic and international brands to open regional debut stores, and promotes the revitalization of existing land resources to improve services, according to a guideline jointly issued by the Ministry of Commerce and other authorities.

The guideline urges better services that cater to the elderly and children, more efficient urban-rural distribution networks, and stronger county-level employment, as well as more channels for residents to increase their incomes.

The measures come as China seeks to give consumption a bigger role in driving economic growth.

The lower-tier markets, generally referring to third-tier and smaller cities, counties, townships and rural areas, account for about 70% of China's population and 60% of total retail sales of consumer goods.

The lower-tier markets have diverse needs across different levels, said Shen Bing, a researcher at an institute under the National Development and Reform Commission (NDRC), noting that this diversity can provide broad room for businesses to develop new service models while creating new momentum for consumption.

Official data showed that retail sales of consumer goods in rural areas rose 2.4% year on year in the first seven months of 2026, 1.3 percentage points faster than in urban areas.

County- and township-level retail sales were estimated to account for nearly 40% of the country's total.

China's 2,800-plus county-level administrative divisions form a vast and diverse domestic market, said Chen Xi, a researcher with the NDRC, noting that consumption upgrade is gradually extending from major cities to county-level markets, providing an endogenous source of consumption growth.

For businesses, China's county-level markets are becoming a strategic growth area as consumers seek a wider range of products and services closer to home.

Jiajiayue, a supermarket chain that originated in east China's Shandong Province, has spent years expanding its presence in county-level markets.

Of the group's nearly 18 billion yuan (about $2.65 billion) in revenue in 2025, about half came from county-level markets.

"We have more than 1,000 stores across the country, about 60% of which are rooted in county-level markets," said Wang Peihuan, chairman of Jiajiayue Group.