China's household income growth decelerated in the first quarter, failing to keep pace with overall economic expansion, prompting experts to call for the swift implementation of detailed income growth measures outlined in recent government plans.

Data from the National Bureau of Statistics (NBS) showed that per capita disposable income increased by 4.9 percent year-on-year in nominal terms during the January-March period, reaching 12,782 yuan ($1,870). After adjusting for inflation, real income growth stood at 4 percent. Both nominal and real growth rates were slightly below the full-year 2025 figures by 0.1 and 1 percentage point, respectively. Meanwhile, household spending growth slowed more notably, with per capita consumption expenditure climbing 3.6 percent nominally and 2.6 percent in real terms, lower than the prior year’s full-year performance by 0.8 and 1.8 percentage points respectively.

Despite economic stabilization, income growth has lagged behind recovery efforts, especially among middle- and low-income groups, which traditionally have a higher propensity to consume. Zhang Jun, chief economist at China Galaxy Securities, pointed out that these groups’ slow income improvement, combined with strong precautionary savings behavior, has restrained consumption. Correspondingly, the average propensity to consume—household spending as a share of disposable income—fell to 62.2 percent in the first quarter from 63.3 percent in the same period of 2024, according to Yukai Securities.

The 2024 Government Work Report emphasized the need to develop and implement income growth strategies targeting urban and rural residents, focusing on boosting low-income earners’ wages, increasing property income, and refining remuneration and social security systems. The urgency of such measures has intensified given that current economic gains have yet to translate rapidly into household income growth, experts said.

Huang Qianhui, a researcher at the Chinese Academy of Social Sciences Institute of Economics, noted that consumer behavior largely depends on expected future income. He suggested that formalizing income growth plans could enhance residents’ income expectations and thus stimulate consumption.

Wages remain the primary component of household income, contributing 57.3 percent according to NBS figures, with per capita wage earnings rising 4.9 percent to 7,319 yuan in the first quarter. Huang stressed the importance of stable employment as the foundation for wage increases and advocated for enhanced support to micro and small enterprises and labor-intensive industries, expanded job opportunities in emerging sectors, and improved vocational training.

In addition to wage growth, diversifying income sources is viewed as critical to optimizing household income structures and promoting consumption. Luo Zhiheng, chief economist at Yukai Securities, highlighted the historic underperformance of property income, citing the ongoing weakness in the real estate market. To address this, the government plans to encourage listed companies to increase cash dividends and share buybacks to bolster residents’ property income. In 2023, over 3,500 listed companies distributed a total of 2.55 trillion yuan in cash dividends, marking a 6.3 percent year-on-year increase.

However, Tian Xuan, dean of the Guanghua School of Management at Peking University, identified challenges in China’s dividend environment, including instability, uneven payout ratios, and inadequate regulatory oversight. Tian recommended strengthening dividend policies by linking payouts to company performance, improving transparency, and fostering long-term sustainability.

Experts also underscored the need to expand social security and redistributive measures to reduce precautionary savings and encourage consumption. Wang Qing, chief macro analyst at Orient Golden Credit Rating International, emphasized that gaps in healthcare, education, and retirement protections prompt households to save more cautiously. Wang advocated increasing basic old-age benefits for rural and nonworking urban residents, raising medical insurance reimbursement rates, and promoting equal access to public services. Furthermore, targeted transfer payments to rural areas, underdeveloped regions, and low-income households are key to safeguarding basic living standards through fiscal support and social assistance.

As China seeks to balance economic recovery with inclusive growth, analysts unanimously stress the importance of prompt and concrete policy actions to ensure the benefits of expansion reach all segments of society.