Core Viewpoint - Expanding domestic demand is essential for maintaining stable economic growth and is a key component of Xi Jinping's economic thought. The recent guidance from the People's Bank of China and other departments emphasizes the importance of enhancing consumption capacity and optimizing the consumption environment to counter external uncertainties and promote high-quality economic development [1][2][3]. Group 1: Importance of Consumption - Short-term, boosting consumption is necessary to maintain economic stability amid increasing external risks, as domestic demand is expected to contribute 69.7% to economic growth in 2024, with final consumption expenditure accounting for 44.5% [2][3]. - Long-term, enhancing consumption supports economic transformation by increasing resilience and promoting industrial upgrades, allowing domestic markets to reduce reliance on external markets [4]. Group 2: Challenges to Consumption Dynamics - The slowdown in consumer spending is primarily driven by changes in expectations and financial conditions, with rising uncertainty leading to cautious spending behavior [5][6]. - High household debt levels, which have increased from 38% of GDP in 2015 to 60% in 2024, are squeezing disposable income and pressuring families to reduce consumption [6][7]. Group 3: Mechanisms to Foster Consumption - Government measures such as consumption vouchers and trade-in subsidies have shown significant short-term effects on durable goods and service consumption, with retail sales of home appliances and communication equipment rising by 24%-25% year-on-year in early 2025 [8][17]. - Structural reforms are necessary for sustainable consumption growth, including reducing unnecessary overtime to increase leisure time, improving the social security system, and reforming the household registration system to enhance consumer confidence and capability [9][10][16]. Group 4: New Consumption Growth Points - Emerging sectors like new energy vehicles, the silver economy, and domestic brands are expected to offset traditional consumption declines, with new energy vehicle sales growing by 35.5% last year [11][12]. - The silver economy is projected to create numerous job opportunities and economic growth points as the aging population's diverse needs increase [12]. Group 5: Lessons from Japan - To avoid falling into a "low-desire society" like Japan's "lost three decades," China should implement proactive fiscal and monetary policies, enhance social security, and improve residents' income expectations [13][14][15].