China offers immense investment opportunities in consumer market

China presents immense opportunities for investment and growth in its consumer market, driven by consumption upgrading, according to a report released by PwC recently.

China Economic Net said that the report highlighted rising demand from youth, rural populations, and elderly consumers, with China’s 2024 GDP growing by 5 per cent, equivalent to the economy of a mid-sized country.

The Chinese government has also rolled out measures to boost consumption, including income growth initiatives and trade-in programmes for homes and vehicles.

Emerging trends include young consumers driving demand for immersive experiences and smart products, rural areas showing strong appetite for appliances and e-commerce, and the elderly contributing significantly to premium consumption sectors such as health, tourism, and education.

Technological innovation and sustainability are further enhancing market dynamics. Retail sales rose by 4 per cent in early 2025, while sales of energy-efficient appliances and new energy vehicles surged during the Spring Festival.

Global executives from Siemens, Corning, and S4 Capital underscored China’s robust consumer market and reaffirmed long-term investment plans, citing its innovation-driven, high-quality growth trajectory. Meanwhile China’s central bank said it will change the way it sells its medium-term loans, a move that market participants say may further erode the significance of role of such a bond instrument in guiding monetary policy.

The People’s Bank of China said it will issue 450 billion yuan ($62.03 billion) of one-year medium-term lending facility (MLF) loans on Tuesday.

And starting this month, MLF loan operations will be carried out by adopting a fixed-quantity, interest-rate bidding, and multiple-price bidding method, the PBOC said.

“The fixed volume, auction by bids is another step taken to fade the role of MLF rate as a policy guidance,” said Frances Cheung, head of FX and rates strategy at OCBC Bank.

“The rates will now be determined by a price discovery process which will help policy maker to gauge market demand at different interest rate levels.”

The adjustment will “keep banking system liquidity reasonably ample,” the PBOC said in a statement, “and better fulfil differentiated funding needs at different institutions.” China’s central bank has shifted to use the seven-day reverse repo rate as its main policy rate, and gradually faded the significance of interest rates on other bond tools.

A batch of 387 billion yuan in MLF loans was due to expire this month. Tuesday’s operation is expected to inject 63 billion yuan on a net basis into the market to “help support market liquidity,” OCBC’s Cheung said.

China’s central bank said on Friday that it will cut banks’ reserve requirement ratio and interest rates at the “appropriate time,” according to a quarterly meeting of its monetary policy committee.