China has started to implement the outline of the strategic plan for expanding domestic demand (2022-35), which was issued in December by the central leadership. The action plan has identified boosting consumer spending and accelerating consumption upgrading as key tasks of the central government.

"There is significant room for rebound in the consumer market, especially when China's exports are facing uncertainties and domestic investment is gradually reaching saturation. The resurgence in consumer demand can drive the recovery of industrial production and business operation, and further promote China's economic growth," Fu said.

The strong policy push shows that China is further defining the crucial role of consumption as a persistent pull on the economy and a lasting driving force for growth. It reflects that the country's consumer market will usher in a new development paradigm in which consumer demand is constantly upgraded, requiring high-quality products and services to satisfy material and spiritual consumption needs, global accounting firm Deloitte said in its 2023 China Consumer Insight and Market Outlook report.

Consumption in China has rebounded strongly since the country lifted its COVID-related restrictions. Retail sales in the first quarter rose 5.8 percent year-on-year, reversing the decline of 2.7 percent year-on-year in the fourth quarter of 2022, according to the National Bureau of Statistics.

To further promote consumption growth, policymakers will likely remove administrative restrictions that impede people's consumption abilities in areas such as automobile and housing, and offer more policy incentives such as lower mortgage rates and smaller down payment requirements for home buyers in lower-tier cities, said Wang Yun, a senior research fellow at the Chinese Academy of Macroeconomic Research.

"The (central) government should increase fiscal support through greater tax relief, improve social security coverage and more targeted transfer payments to effectively bridge urban-rural income gaps, improve the country's overall social welfare program and substantially raise the income of low-income families," Wang said.

China's prosperity, with its 1.4 billion consumers, affects the fates of domestic and foreign businesses and the prospects of global economic growth. The country's demand has served as a crucial driver of global growth in the past decades and will continue to do so in the years to come, experts said.