China has introduced a comprehensive policy package aimed at boosting consumer spending and diversifying markets in its extensive network of counties and townships, responding to the growing economic significance of these areas. The Ministry of Commerce, along with eight other central government departments, released the guideline on August 18, proposing 18 measures targeting upgrades in commercial infrastructure, business innovation, product supply, distribution channels, and financial support.
County and township markets have increasingly contributed to China’s overall consumption. In the first seven months of 2025, retail sales of consumer goods in these areas accounted for 39.1 percent of the national total, marking a slight increase from the previous year. Rural retail sales grew 2.4 percent year-on-year during this period, more than twice the 1.1 percent growth seen in urban centers. This rural retail growth has either matched or exceeded urban expansion for 55 months consecutively, according to the Ministry of Commerce.
Counties cover approximately 90 percent of China’s land and house nearly half of its permanent population, generating around 40 percent of the country’s economic output. Their geographic scope, local industries, and economic structures provide significant room for further development, noted Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation. However, product supply has not always aligned with evolving consumer needs. Nearly half of rural respondents in an official survey pointed to limited product variety as a major offline shopping issue, especially in sectors such as elderly care, childcare, healthcare, leisure, and entertainment.
The policy marks a shift from the previous focus on establishing basic commercial networks to actively stimulating market vitality. Earlier efforts centered on building shopping outlets, logistics, and rural e-commerce systems connecting counties with villages and townships. With much of this groundwork complete, policymakers are now emphasizing improving the quality and diversity of goods and services, as well as creating a more conducive environment for businesses and consumers.
The new measures include renovating commercial facilities, repurposing idle properties, expanding chain store presence in counties, and supporting local brands. The policy also promotes the integration of commerce with agriculture, culture, tourism, and sports to broaden consumption scenarios.
Industry observers point to growing demand for higher-quality goods and services in county areas. Platforms such as Meituan have reported faster growth in users and local-service orders in counties compared to major cities. Areas like instant retail, dining, leisure, household services, and local tourism are gaining traction. Retail chains are also expanding rapidly in lower-tier markets. Busy Ming Group, a leading snack and beverage retailer, operated nearly 22,000 stores nationwide by the end of 2025, with two-thirds located in counties and townships.
Nonetheless, rapid market growth does not ensure success for all brands. Data from NielsenIQ reveal that while fast-moving consumer goods (FMCG) sales in county-level markets increased at 2.5 percent annually, only four of the top 20 FMCG producers recorded growth in these areas. Experts warn that counties are not smaller versions of urban markets; they require tailored store formats, pricing strategies, and product offerings prioritizing essential needs and value. Maintaining the viability of local shops alongside expanding chain operators is also seen as critical.
The policy advocates differentiated strategies for China's more than 1,800 counties, considering economic size and local conditions. Wealthier counties will be encouraged to develop upscale commercial districts and attract new brands, mid-level counties to emphasize local industries and unique products, and smaller counties to focus on basic retail and logistics services.
Sustainable growth in county consumption will depend on employment and stable incomes. The guideline supports job creation, entrepreneurship, and offers interest subsidies for consumer loans and service businesses. However, experts caution that credit access alone cannot replace the fundamental need for reliable employment and income, which remain essential for long-term consumer demand.