context: The Ministry of Commerce and eight other agencies issued a 'Notice on promoting green consumption' on 4 January 2026. The PRC's green transition framework is evolving from an exclusive focus on the production side toward a balance between green production and consumption.
Green transitions have followed a pattern of policy first, market next and societal co-construction, argues Zheng Ying 郑颖 China Carbon Neutrality 50 Forum member. The pattern reflects three practical considerations
- building green low-carbon production capacity is the starting point of the transition
- high costs and uncertainty of the early transition phase require policy support as a backstop
However, as green production continues to expand, a lack of consumption-side measures will result in structural challenges
- diminishing marginal policy returns
- limited policy resources spread across sectors reduce effectiveness
- blocked value transmission
- environmental value of green products cannot be translated into corporate returns, undermining incentives for innovation
As production capacity in green sectors has strengthened, the central challenge has shifted toward building a coordinated supply-demand market system and enhancing user willingness to consume green and low-carbon products.
The PRC has made progress in this regard, particularly in the case of NEVs, where consumer decisions shifted from subsidy to value-driven, allowing for market expansion. This approach has extended to additional sectors through
- innovating green power consumption mechanisms
- stimulating green power demand
- promoting multi-industry integration
- expanding application scenarios
Yet despite progress, most consumption policies are still concentrated in mid-stream industrial demand rather than broad-end consumer markets. Green value and transition costs are transmitted only within industrial chains, placing pressure on intermediate firms.
The PRC's green transition has entered a critical middle stage. The next phase must answer a central question: are consumers willing to choose green? The key lies in translating environmental benefits into clear market signals, converting policy incentives into stable consumer preferences and turning corporate costs into real brand value/competitive advantage.
Drawing on the NEV experience, a phased approach can be adopted
- early guidance
- incentives such as subsidies, discounts and value-added services can reduce trial costs and establish consumption habits
- mid-term awareness cultivation
- policy should shift toward value communication, while strengthening certification, labelling, transparency and education
- long-term value formation
- stable demand from the consumption side will encourage producers to treat green tech and low-carbon manufacturing as core competitve advantages