China’s High-Spending Counties Emerge as Bright Spot as Domestic Demand Remains Weak

 China’s High-Spending Counties Emerge as Bright Spot as Domestic Demand Remains Weak

## Introduction: The Spending Boom You Haven't Heard About

When Zhang Liang decided to open a Sam's Club reseller shop in Jingshan, a lesser-known city in Hubei province with a population of fewer than 600,000, he was taking a calculated risk. The former truck driver invested about 600,000 yuan (US$88,969) in May 2026, sourcing goods from authorised Sam's stores to sell locally. He was betting that consumers in Jingshan—hardly among China's most prosperous areas—would pay a premium for better-known brands and higher-quality products.

His gamble paid off. Jingshan's appetite for Sam's Club-style retail is a sign of growing consumer enthusiasm in many smaller, traditionally not-so-wealthy cities, in contrast to generally dampened sentiment nationwide.

Zhang is not alone. Across China's vast network of counties and smaller cities, a quiet spending boom is underway—one that stands in stark contrast to the national narrative of weak domestic demand, a prolonged property slowdown, and cautious consumers.

While economists fret over China's anaemic growth and the troubled property sector, millions of consumers in the country's smaller cities are opening their wallets. In 2025, at least 13 counties recorded urban per capita consumer spending exceeding 53,000 yuan (approximately US$7,800)—putting them on par with Beijing and Shanghai. Five counties in eastern China's Zhejiang province—Leqing, Yuhuan, Yiwu, Wenling, and Haiyan—actually surpassed spending levels in both of China's megacities.

This isn't a minor statistical quirk. It's a fundamental reshaping of China's consumer landscape that carries important lessons for investors, businesses, and anyone trying to understand where the world's second-largest economy is really heading.

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## The Numbers That Tell the Story

### When Counties Outspend Cities

The data is striking. According to first财经's analysis of official statistics, at least 13 counties recorded urban per capita consumer spending above 53,000 yuan in 2025—a threshold that puts them in the same league as Beijing and Shanghai. The five Zhejiang counties that surpassed both megacities represent a new class of "super consumer counties" that are rewriting the rules of Chinese retail.

To put this in perspective, Beijing's per capita consumer spending was 50,667 yuan in 2025, while Shanghai's was 54,765 yuan. Leqing, Yuhuan, Yiwu, Wenling, and Haiyan all exceeded these figures—meaning that residents in these relatively small counties are spending more per person than residents in the financial and political capitals of China.

### The Scale of the County Economy

These aren't isolated anomalies. China's 1,867 counties are home to approximately 724 million people—more than twice the population of the United States—and account for roughly 40% of the country's GDP and 90% of its land area. County and township markets accounted for 39.2% of China's retail sales in the first half of 2026. By the first quarter of 2026, that share had already reached 40.3%.

The numbers tell a story of momentum. In the first half of 2026, rural retail sales grew 2.5% year-over-year, outpacing urban growth by 1.3 percentage points. County-level consumer spending has been growing faster than in major cities for multiple consecutive quarters.

Meanwhile, the number of "GDP trillion-yuan counties" (those with GDP exceeding 100 billion yuan, approximately US$14.8 billion) has surpassed 75. Thirteen counties now have GDP exceeding 200 billion yuan, including household names like Kunshan, Jiangyin, Jinjiang, Zhangjiagang, Changshu, Cixi, and Yiwu.

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## What's Driving the County Spending Boom?

### Lower Costs, Lighter Debt

One of the most important factors behind the county spending surge is simple arithmetic: **money goes further in smaller cities**.

Compared with residents of first- and second-tier cities, county and rural residents face significantly lower living costs. Housing is cheaper. Transportation is less expensive. Daily necessities cost less. And critically, household leverage ratios are much lower in smaller cities than in the major urban centers.

This matters enormously for consumer behaviour. In Beijing or Shanghai, a significant portion of household income goes toward mortgage payments, rent, and other fixed costs. In counties, housing costs are a fraction of what they are in the megacities—often one-tenth or less. That leaves more disposable income for discretionary spending on goods, services, and experiences.

As one analysis noted, "compared with first- and second-tier city residents, county and rural residents have relatively lower living costs, lower household leverage ratios, weaker 'crowding-out effects' of household debt on consumption expenditure, and a stronger willingness to convert income into consumption".

### The Return of the Migrant Worker

Another critical driver is the reversal of migration patterns. After decades of rural-to-urban migration, the tide is turning. Population flows have shifted from cross-province movement to intra-province movement, from first-tier megacities to second-tier provincial capitals and regional centres—and in some cases, back to smaller cities.

This "return migration" is bringing capital, skills, and consumption habits back to the counties. Migrant workers who spent years in the cities bring with them exposure to urban lifestyles, brand preferences, and spending patterns. When they return home—whether permanently or seasonally—they don't leave those habits behind.

The numbers are significant. In one county-level city, more than 7,000 former residents have returned, attracted by new employment opportunities created by over 20,000 new jobs since 2021. These returning migrants bring not just their labour but their consumption power.

### The Urbanization of the Countryside

China's broader urbanization push is also playing a role. As the government invests in county-level infrastructure—roads, hospitals, schools, commercial centres—the quality of life in smaller cities improves. This attracts both returning migrants and outside investment.

The 2026 Central Government Work Report explicitly called for "stimulating consumption vitality in the lower-tier market". The "15th Five-Year Plan" for expanding consumption, approved by the State Council in July 2026, set a target of 60 trillion yuan in total retail sales of consumer goods by 2030 and outlined 28 key initiatives.

Government policy is actively supporting the shift. The "Thousand Markets, Ten Thousand Stores" programme is upgrading county-level commercial infrastructure. Subsidies for consumer goods trade-ins are boosting demand for everything from appliances to automobiles.

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## The Consumer Revolution in the Counties

### Premium Brands Go Downmarket

The most visible sign of the county spending boom is the arrival of premium brands in places that were previously considered too small to support them.

Sam's Club, the American membership-only retailer owned by Walmart, has opened stores in five "super counties"—Kunshan, Jinjiang, Zhangjiagang, Jiangyin, and now Yiwu. In March 2026, Yiwu Sam's Club Co., Ltd. was formally established. These are not small, experimental locations. They're full-scale stores serving consumers who are willing to pay membership fees for access to premium goods.

International hotel brands are also making their move. Hilton, Marriott, InterContinental, and Wyndham are all expanding into county-level markets. Luxury and premium brands that once limited themselves to first-tier cities are now opening in cities that most Westerners have never heard of.

Even in Jingshan, a city of fewer than 600,000 people that is "hardly among China's most prosperous areas," multiple Sam's Club resellers are already operating, and Zhang believed there was room for more.

### The "New Tea" Revolution

One of the most visible indicators of the county spending shift is the explosion of "new tea" brands—premium bubble tea and fruit tea chains that have become symbols of China's consumer culture.

These brands, which charge 20-30 yuan (US$3-4) per cup, were once concentrated in first-tier cities. Now they're everywhere in the counties. "New tea drinks, brand coffee shops, and milk tea shops are all rushing to lay out in small and medium-sized cities," according to government-affiliated researchers.

In 2025, county-level active consumers on platforms like Meituan grew more than 15% year-over-year, with order volume growth exceeding 20%—both significantly higher than urban growth rates.

### The Entertainment Boom

County residents aren't just spending on goods—they're spending on experiences. During the 2026 Spring Festival, third- and fourth-tier cities and counties accounted for nearly 60% of box office revenue, the highest share in six years.

As economist Lu Ming explained, this isn't just about rising incomes. It's also about limited alternatives. "Why are county cinemas so popular during Spring Festival? The reason is simple: besides watching movies, some counties have very few other cultural and entertainment activities, so box office revenue is particularly strong".

The result is that movie tickets in counties can actually be more expensive than in big cities—because cinemas have to recoup a year's worth of operating costs during the short Spring Festival window.

### Tourism Goes Rural

The tourism industry is also shifting. During the May Day holiday in 2026, tourists actively avoided crowds and "reverse flowed" into small counties. Hotel bookings in counties like Linquan in Anhui, Hanshou in Hunan, and Lingshan in Guangxi surged by 130-140% year-over-year during Spring Festival.

This "reverse tourism" trend is both a cause and a consequence of the county spending boom. As counties develop better hotels, restaurants, and attractions, they become destinations in their own right—bringing outside spending into local economies.

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## The Broader Context: Why the County Boom Matters

### The Great Divergence in Chinese Consumption

The county spending boom is happening against a backdrop of broader weakness in Chinese domestic demand. The national economy grew at one of its lowest rates in decades in the second quarter of 2026. Consumer spending in the major cities has been sluggish, weighed down by the prolonged property slowdown, high household debt, and cautious sentiment.

This has created what some economists call a "great divergence" in Chinese consumption. High-tier cities are struggling. Counties and smaller cities are booming.

The divergence reflects structural differences in the two markets. In the big cities, housing costs consume a large portion of household income, leaving less for discretionary spending. In the counties, lower housing costs mean more disposable income—and a greater willingness to spend.

As McKinsey has projected, by 2030, approximately 66% of China's incremental personal consumption will come from third-tier and below cities, counties, and rural markets. The consumer growth engine of China's future is not Shanghai or Beijing. It's the 1,867 counties that most Westerners have never heard of.

### The Policy Implications

The county spending boom has significant implications for Chinese economic policy. The government's efforts to "expand domestic demand" have found a natural ally in the counties. Rather than trying to stimulate spending in already-saturated first-tier cities, policymakers are focusing on unlocking consumption potential in the vast lower-tier market.

The "15th Five-Year Plan" for expanding consumption explicitly calls for "strengthening county-level consumption markets" and "stimulating consumption vitality in the lower-tier market". The government is investing in county-level commercial infrastructure, supporting the expansion of brand stores into smaller cities, and providing subsidies for consumer goods purchases in rural areas.

### The Investment Opportunity

For investors, the county spending boom represents a significant opportunity. Consumer-facing companies that are expanding into lower-tier markets are positioning themselves for the next phase of Chinese consumption growth.

International brands that are already making the move include Sam's Club, Hilton, Marriott, and Starbucks. Domestic brands like "Mingming Hen Mang" (a snack chain) have already established a presence in 75% of China's counties, with 22,000 stores covering the country.

But the opportunity extends beyond retail. As counties develop, they need better infrastructure, healthcare, education, and financial services. Companies that can provide these services—or enable their delivery—stand to benefit from the county spending boom.

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## The Challenges: Not All Counties Are Booming

It's important to note that not every county is experiencing a spending surge. The phenomenon is concentrated in specific types of counties.

### The "Return Migration" Counties

As economist Lu Ming explained, the counties experiencing the most dramatic consumption growth are those with significant out-migration during the year and dramatic in-migration during holidays. "Basically, counties where there aren't many people normally, where most have gone out to work, and where the population doubles during Spring Festival—these are the counties where this phenomenon is most likely to occur".

These counties benefit from the seasonal return of migrant workers who bring urban consumption habits—and urban spending power—back to their hometowns.

### The "Industrial" Counties

Another category of high-spending counties are those with their own industrial bases. Counties like Yiwu (known for its massive wholesale market), Kunshan (a manufacturing hub), and Jinjiang (a footwear and apparel centre) have their own economic engines. They generate local employment and local wealth, supporting a permanent consumer class.

These counties often have their own wealthy residents—entrepreneurs, factory owners, and professionals—who have the spending power to support premium retail and services.

### The "Peripheral" Counties

A third category includes counties on the periphery of major cities. These benefit from spillover effects from the nearby megacities while offering lower living costs. Residents may work in the city but live in the county—and do much of their spending locally.

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## Frequently Asked Questions (FAQs)

### 1. Which Chinese counties have the highest consumer spending?

In 2025, at least 13 counties recorded urban per capita consumer spending above 53,000 yuan. The top five—Leqing, Yuhuan, Yiwu, Wenling, and Haiyan, all in Zhejiang province—surpassed both Beijing and Shanghai.

### 2. How big is China's county-level economy?

China's 1,867 counties are home to approximately 724 million people—more than twice the U.S. population—and account for roughly 40% of China's GDP and 90% of its land area. More than 75 counties now have GDP exceeding 100 billion yuan (approximately US$14.8 billion), with 13 exceeding 200 billion yuan.

### 3. Why are county residents spending more than city residents?

County residents face significantly lower living costs, particularly for housing. Household debt levels are also lower in smaller cities, meaning less household income is consumed by debt payments. This leaves more disposable income for discretionary spending on goods, services, and experiences.

### 4. What is driving the county spending boom?

Several factors are at play: lower costs and lighter debt burdens; return migration bringing urban consumption habits back to the counties; government policies supporting lower-tier market development; and the expansion of premium brands and services into county-level markets.

### 5. Are international brands expanding into Chinese counties?

Yes. Sam's Club has opened stores in five "super counties" including Kunshan, Jinjiang, Zhangjiagang, Jiangyin, and Yiwu. International hotel brands including Hilton, Marriott, InterContinental, and Wyndham are also expanding into county-level markets.

### 6. What is the outlook for county-level consumption?

McKinsey projects that by 2030, approximately 66% of China's incremental personal consumption will come from third-tier and below cities, counties, and rural markets. The Chinese government's "15th Five-Year Plan" for expanding consumption explicitly targets lower-tier market development.

### 7. Do all Chinese counties have strong consumption growth?

No. The consumption boom is concentrated in specific types of counties: those with significant return migration during holidays; those with their own industrial bases; and those on the periphery of major cities. Counties with persistent population decline are not experiencing the same spending surge.

### 8. How does this affect the broader Chinese economy?

The county spending boom is helping to offset weakness in consumer demand in major cities. As first-tier cities struggle with high housing costs and cautious consumer sentiment, the counties are emerging as a rare bright spot in China's domestic demand picture.

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## Conclusion: The New Frontier of Chinese Consumption

The story of China's county spending boom is a story about the unexpected places where economic growth is still happening. While the headlines focus on the troubled property sector, sluggish consumption in major cities, and the broader challenges facing the world's second-largest economy, a quieter revolution is underway in the places that most Westerners have never heard of.

In Leqing and Yiwu, in Jingshan and Jinjiang, consumers are spending more per person than residents of Beijing and Shanghai. They're buying premium goods at Sam's Club, staying at international hotels, and filling cinemas during holidays. They're driving a consumption boom that is reshaping China's retail landscape—and creating opportunities for businesses that are paying attention.

The drivers of this boom are structural, not cyclical. Lower living costs and lighter debt burdens mean county residents have more disposable income. Return migration is bringing urban consumption habits back to the countryside. Government policy is actively supporting lower-tier market development. And brands that were once confined to first-tier cities are discovering that the counties are not just viable markets—they're some of the fastest-growing markets in the country.

For investors, the implications are clear. The next phase of Chinese consumption growth will not be driven by Beijing, Shanghai, or Shenzhen. It will be driven by the 1,867 counties that most Westerners have never heard of. Companies that recognize this shift—and position themselves to serve the county consumer—will be the winners of the next decade.

For the rest of us, the county spending boom offers a reminder that economic narratives are rarely as simple as they seem. China's domestic demand may be weak in the aggregate, but beneath the surface, there are pockets of extraordinary growth. The challenge is knowing where to look.

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. All views expressed are based on the analysis of publicly available information, including government data releases, research reports, and media coverage. Economic conditions, consumption patterns, and policy directions are subject to change. The author does not endorse any specific investment strategies or recommendations. Before making any financial or investment decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation. The author is not affiliated with the National Bureau of Statistics of China, the Ministry of Commerce, or any other entity mentioned in this article.*