Interpreting the "15th Five-Year Plan" Outline | Expert Interview with Hong Tao: Building Foundation of Consumer Capacity Through "Investment in People" and Suggesting Shorter Working Days to Unlock New Consumer Potential

Recently, the “Outline of the 14th Five-Year Plan for National Economic and Social Development of the People’s Republic of China” (hereinafter referred to as the “Outline”) was announced, outlining China’s economic development blueprint for the next five years.

Focusing on boosting consumption, the “Outline” addresses four areas: strengthening the foundation of residents’ consumption, releasing the potential of service consumption, expanding and upgrading commodity consumption, and continuously improving the consumption environment, each with specific requirements.

The “Outline” states that efforts should be coordinated to promote employment, increase income, and stabilize expectations, accelerating the formation of a long-term mechanism to expand residents’ consumption. It emphasizes stabilizing and expanding employment capacity, supporting stable jobs and new employment opportunities for enterprises and individuals, actively cultivating new professions and positions, and exploring new employment spaces in digital economy, green economy, and silver economy.

How can a long-term mechanism for expanding residents’ consumption be established? How should the minimum wage standards be steadily increased, and what is the scope for regional adjustments? What signals are released by adjusting the minimum living standard in relation to per capita consumption expenditure? What key obstacles need to be addressed to continuously improve the consumption environment?

Focusing on these questions, a reporter from Daily Economic News (hereinafter referred to as NBD) interviewed Hong Tao, Vice Chairman of the China Consumption Economics Society and Director of the Beijing Technology and Business University Institute of Business Economics.

Increasing the Minimum Wage Standards Should Be More Autonomous for Local Governments

NBD: The “Outline” mentions the need to establish a long-term mechanism to expand residents’ consumption. How can this be achieved? What obstacles need to be overcome?

Hong Tao: The 20th CPC Central Committee’s Fourth Plenary Session proposed “leading new supply with new demand, and creating new demand through new supply.” Therefore, we should invest in people to solidify the foundation of consumption capacity and connect “employment and income growth” with “expanding consumption.”

To address the obstacles faced by consumption upgrading, policies must focus on improving people’s livelihoods to build a sustainable consumption mechanism. Key issues include motivation to consume, income levels, confidence to spend without worries, willingness driven by interest, psychological, aesthetic, behavioral, and legal factors, as well as leisure consumption—having money, free time, health, and the desire to spend.

NBD: As you just mentioned, the “Outline” states that the minimum wage should be steadily increased to strengthen residents’ consumption base. Can this effectively stimulate consumption? How much room is there for regional increases?

Hong Tao: I believe that economic development levels vary across regions, and income levels differ accordingly. Therefore, the scope for raising the minimum wage should be more autonomous for local governments and not a one-size-fits-all nationwide approach. Each region should determine the standard based on its economic development and fiscal situation.

In addition to raising minimum wages, we can also improve residents’ income through adjusting working days. Drawing from international experience, we could extend weekends from 2 days to 2.5 days, or even shift to a 4-day workweek. This means reducing working days without changing wages, giving residents more free time and satisfaction. This can increase consumption and indirectly raise income levels—since working hours decrease but income remains stable.

Services related to artificial intelligence are becoming a new direction for expanding employment

NBD: The “14th Five-Year Plan” mentions “continuously expanding the middle-income group,” while the “15th Five-Year Plan” focuses more on increasing income for urban and rural residents. How do you view this difference?

Hong Tao: I think the wording in the “15th Five-Year Plan” is more aligned with reality and the development philosophy of socialism with Chinese characteristics. It emphasizes considering the interests and needs of various social consumption groups, not just a small segment.

Chinese modernization aims not only to expand the middle-income group but also to build a multi-layered, multi-criteria, diversified consumption pattern. This includes luxury and everyday consumption, personalized and mass consumption. Therefore, focusing on income growth for urban and rural residents in the “15th Five-Year Plan” can better stimulate consumption potential across a broader range, embodying the development concept of “investing in both goods and people.”

NBD: The “Outline” mentions “standardizing and improving the dynamic adjustment mechanism for low-income security standards linked to per capita consumption.” What signals does this send?

Hong Tao: I believe it signals that the government is paying more attention to the living conditions of low-income groups and their consumption. Linking the minimum living standard to residents’ per capita consumption expenditure through a scientific and stable quantification method ensures that the standard keeps pace with economic and social development, better safeguarding the basic living needs of low-income populations.

In 2020, China completed the goal of poverty alleviation in the new era. Since 2021, we have embarked on a new journey to build a modern socialist country comprehensively. During the “14th Five-Year Plan” period, our main task is consolidating and expanding the achievements of poverty alleviation. Looking ahead to the “15th Five-Year Plan,” we aim not only to sustain these results but also to ensure that incomes of low-income groups rise in tandem with social and economic development. Therefore, adjusting the low-income standard in relation to per capita consumption expenditure clarifies the standards and objectives.

NBD: Regarding increasing income and stabilizing expectations, the “Outline” proposes to stabilize and expand employment capacity. With the rapid development of artificial intelligence, where are new opportunities for job stability and expansion?

Hong Tao: The rapid development of AI globally is an irreversible trend, but AI is ultimately a product of human technological innovation. Its purpose is to benefit workers by replacing heavy, repetitive tasks, reducing their workload.

We should not fear AI; instead, we should see it as a way to lighten labor burdens and improve efficiency. For example, as I mentioned earlier, reducing workdays can stimulate consumption, and AI can help achieve this.

As AI advances, many production and circulation activities will rely on AI technology. This will create more jobs related to AI services, becoming a new avenue for employment expansion. Of course, the key is having the right talent to meet these new job requirements. Moving forward, we need coordinated development in science, education, and talent cultivation to achieve more precise matching between jobs and workers.