China's retail sales of consumer goods, a major indicator of the country's consumption strength, expanded 4.6 percent year on year in the first quarter (Q1) of 2025, as government pro-consumption policies paid off, official data showed on Wednesday.

This growth pace is 1.1 percentage points faster than the 2024 level, according to the National Bureau of Statistics (NBS). Total retail sales of consumer goods reached 12.47 trillion yuan (about 1.73 trillion U.S. dollars) in the January-March period.

In March alone, retail sales of consumer goods rose 5.9 percent year on year, accelerating from the 4 percent growth recorded in the first two months, according to the NBS.

China's online retail sales went up 7.9 percent year on year during the first quarter, sustaining relatively fast growth. Backed by the government's consumer goods trade-in program, sales of communication devices surged 26.9 percent, while that of home appliances and audio equipment went up 19.3 percent.

China has positioned the boosting of spending and expansion of domestic demand as a priority in this year's economic work agenda. The country unveiled a comprehensive pro-spending policy package last month, which aimed to strengthen consumer confidence via measures including the promotion of income growth and a reduction of financial burdens.

In a broader push to bolster domestic demand, China also renewed its consumer goods trade-in program in 2025, increasing funding from last year's 150 billion yuan to 300 billion yuan through ultra-long special treasury bonds and extending subsidies to more electric gadgets and home appliances, such as smartphones, tablets and smartwatches.

"Given the current situation, these policies are taking effect and their impact is becoming increasingly evident," Sheng Laiyun, deputy head of the NBS, told a press conference on Wednesday.

He cited data from the commerce ministry which shows that as of April 7, Chinese consumers had purchased 35.71 million units of home appliances through the trade-in program and submitted 2.085 million applications for automobile trade-in subsidies.

Notably, services consumption expanded even faster than that of goods, with retail sales of services growing by 5 percent in the first quarter of 2025 compared with a year earlier.

Sheng, in particular, noted the double-digit growth in consumption related to upgrading of consumption structure. In the first three months of this year, China's per capita expenditure on transportation and communications grew by 10.4 percent year on year, while that on education, culture and entertainment increased by 13.9 percent.

"Services spending is a key sector to support future consumption growth, which boasts substantial growth potential," Sheng told the press.

Wednesday's data also revealed that China's gross domestic product (GDP) grew 5.4 percent year on year in the first quarter of 2025. The country's economy grew 5 percent year on year in 2024, and the Chinese government has targeted full-year economic growth at around 5 percent for 2025.