The Chinese economy is expected to rebound continuously in 2025 despite new variables, an economist said as reported by Chinese financial news outlet Yicai on Sunday.

The unprecedented popularity of the domestic cultural and travel consumption market during the Spring Festival holiday and the emergence of DeepSeek AI model have contributed to people’s confidence in the Chinese economy, as well as positive expectations, said Guan Tao, global chief economist at BOCI China.

According to the report, the country plans to further boost consumption among urban residents. Data show that the median nominal per capita disposable income of urban residents grew 4.65 percent on a five-year compound average basis from 2020 to 2024.

Furthermore, China needs to promote a new type of urbanization and comprehensive rural revitalization in a coordinated manner, promote the integrated development of urban and rural areas, and further stimulate rural consumption potential.

China’s economic policy focuses have shifted to benefiting people’s livelihood and promoting consumption, a signal sent by a meeting in July 2024.

Recently, the government has pre-delivered 81 billion yuan ($11.09 billion) of funds for consumer goods trade-in in 2025 to support local governments in the continuous implementation of the policy.

Moreover, China launched an action plan to promote large-scale equipment renewal and trade-in of consumer goods in March 2024 as part of efforts to boost domestic demand and support economic growth. Official data showed that the trade-in scheme has boosted last year’s sales of automobiles by 920 billion yuan, and that of home appliances by 240 billion yuan.