Signal China would need domestic demand to rise more than six points of GDP

Summary

MGI estimates that for China to make up for shrinking household property investment, domestic demand would have to rise by more than six percentage points of GDP. The figure approximates how far household real investment has fallen below its 2010s average. The report frames higher household consumption as China's key swing factor toward productivity acceleration, putting the required shift at six to seven percentage points of GDP. Reforms that lift consumption, such as better health care and pension safety nets, as well as wages, education, and support for child and elder care, could also spur investment by private firms. Recent government plans discussed in 2025 suggest that boosting consumption may become a policy priority.