On March 29, 2026, Xinhua published an elaborate commentary celebrating the “Guochao craze.” It refers to a national trend in which consumer preferences are shifting most pronouncedly towards Chinese-designed and branded goods and services. The commentary reflects not just broader excitement about rising demand – especially among Gen-Z citizens – for domestic offerings, but also Beijing’s theoretical view that such nationalistic internal consumption can help address structural problems affecting China’s dual-circulation economy.
To put the commentary’s emphases in perspective, Xi Jinping, in his 2026 New Year address, said that cultural IPs such as Sun Wukong and Nezha have “taken the world by storm” and the traditional Chinese aesthetics have become a “top-tier trend” among young people. From there, it is a case built on some numbers. Even by 2024, Chinese domestic products reportedly accounted for 76 per cent of the total FMCG market. This year, Spring Festival tourism saw 596 million trips and 800 billion yuan in spending, both record highs achieved in 2026. These trends are also broadly aligned with the goals and vision of the recently unveiled 15th Five-Year Plan (2026-2030), which explicitly calls for the cultivation of cultural industries, enterprises, and brands, and aims to allocate dedicated budgets to that end.
Truly, many recent commercial successes of Chinese-origin brands cannot be underplayed. For example, Pop Mart, the company whose Labubu “blind-box” toy became a global phenomenon in the last two years, reported revenue of 37.12 billion yuan in 2025 – up 185 per cent y-o-y – with net profit surging by 308 per cent. Markets outside mainland China accounted for ~44 per cent of Pop Mart’s revenue, and in 2026, it plans to open 20 more stores in the US on top of the 60 it already operates. Then, there are attested numbers that back Xi’s confidence in Nezha and Wukong. By July 2025, the movie Ne Zha 2 grossed ~US$ 2.13 billion at the global box office, and joined the list of the top five highest-grossing films of all time. Similarly, Black Myth: Wukong became China’s first AAA-rated game with worldwide success. All three are instances of visible market outcomes, driven by actual consumer choices.
Where certain expectations must be tempered, is while thinking of Guochao as evidence of “rising consumer vitality,” even as broader macroeconomic trends reveal a slightly different story – one that the Chinese-party state is much too familiar with.
Till the end of 2025, China has experienced 11 consecutive quarters of deflation, which is the longest such streak in 30 years. A glimmer of hope was offered by the 1.3 per cent jump in annual inflation in February 2026, up from 0.2 per cent in January – but it may not be enough to enable a structural reversal of the tense macroeconomic realities. Growth in consumer prices and retail sales of consumer goods was also meagre; in December 2025, the latter grew by only 0.9 per cent y-o-y. According to the Macquarie Group, since 2021, 85 per cent of the gains underpinning property sector prices have been erased by the crackdown on the real estate sector, while household savings rates have remained over 30 per cent since 2020.
These numbers show Guochao in a different light. The fact that Li-Ning and Anta are gaining market share at international fashion events, may also indicate that Chinese consumers are choosing domestic brands over the more expensive foreign ones at a time of a budget pinch. Similarly, the appreciation for the growing consumer preference for small products, such as Yiwu Woan jewellery accessories, could perhaps mean that the preference is actually for not-so-grand expenses. Both of these are stories the Xinhua commentary revels in. Hence, the question Guochao raises at the macro level, is this: Will the cultural pride at play inevitably translate into a boost in domestic demand, or will it remain a product of the shift in spending habits from more expensive foreign brands to the relatively affordable Chinese ones?
If the projections of iiMedia Research from March 2026 are to be believed, the “China-chic” market will tentatively surpass 3 trillion yuan in value by 2028. But, per the NBS’s data for January 2026, total retail sales of consumer goods already exceed 50 trillion yuan annually. Even at a full throttle of 3 trillion, Guochao would represent just a minuscule proportion – roughly six per cent – of the total retail economy.
Further, the export dimension of Guochao is also becoming more interesting amid volatile geo-economic trends at play. There is a growing resentment and hostility towards Chinese exports across global markets. Pop Mart’s unique trajectory definitely speaks to the genuine commercial viability of Chinese-origin products worldwide. But at the same time, people purchasing Labubu toys in the US, for instance, are not necessarily developing warmer feelings toward the Chinese exports. And so, if Pop Mart continues to expand in scale in, say, the US market, the story may soon turn away from the craze over its exclusivity-inducing toys, to the drastic repercussions of its profits from American markets.
Scratching below the surface, the Chinese party-state’s embrace of Guochao ultimately speaks to Beijing’s belief and ambition, that culturally motivated domestic consumption can serve as both an economic driver and an impetus for national confidence at a time when the traditional engines of growth are not firing on all cylinders. The 15th Five-Year Plan’s language about expanding “international consumption centers” and removing “unreasonable restrictions in the consumption sector” reflects this vision. But again, Beijing cannot both hope to continue exporting “China-chic” products, without addressing genuine global concerns on overcapacity.
Whether Beijing’s gambit pays off does not depend purely on sales numbers or tourist visits to historical sites, but primarily on whether Chinese households feel secure enough to spend again. Guochao can give consumers reasons to go local, but it cannot, on its own, give a sudden boost to spending habits. That would require redressal of the property overhang and the stimulation of the confidence that three years of deflation have eroded. Until then, the “steaming hot” spring economy that Xinhua describes will return early next year, but not before it has witnessed structural headwinds in preceding quarters.