China's Ministry of Commerce, together with three other government departments, has jointly issued a notice announcing the second batch of 32 pilot cities for the national retail industry innovation and upgrade initiative, the ministry announced on Thursday.

The 32 cities include Qinhuangdao and Baoding in north China's Hebei Province, Wuxi and Yangzhou in east China's Jiangsu Province, and Kaifeng and Xuchang in Henan Province in central China, among others.

In November 2024, the Ministry of Commerce and six other departments released the implementation plan for the retail industry innovation and upgrade initiative. The plan aims to improve the country's modern commercial circulation system, build sound long-term consumption-boosting mechanisms, and accelerate the diversification of consumer services.

Under the plan, pilot cities will be selected annually for retail innovation and upgrading, existing retail facilities will be renovated, and successful practices will be promoted nationwide.

The goal is for a modern retail system to take initial shape by 2029, characterized by abundant supply, balanced distribution, diversified channels, high-quality services, smart and convenient services, and green, low-carbon development.

China announced the first batch of 38 pilot cities in June 2025. The first batch includes the likes of Beijing, Tianjin, Shanghai and south China's Shenzhen.

This latest move underscores China's commitment to expanding domestic demand and boosting consumption as key drivers of economic growth, analysts said.

China aims to raise its total retail sales of consumer goods to around 60 trillion yuan (about 8.85 trillion U.S. dollars) by 2030, according to the plan for expanding consumption during the 15th Five-Year Plan period (2026-2030).

The plan, released in July, outlines 28 specific measures across several dimensions, including boosting consumption capacity, improving the consumption environment, and strengthening institutional mechanisms.

It prioritizes service consumption expansion in areas such as elderly care, childcare, culture, tourism, and health, reflecting a structural shift from goods-dominated consumption to a balanced goods-and-services model. The plan also calls for removing unreasonable restrictions in some sectors, including automobiles and housing, implementing paid leave policies, and strengthening social security safety nets to boost consumer confidence.

In the first seven months of 2026, China's total retail sales of consumer goods reached 28.77 trillion yuan, up 1.2 percent year on year.