BEIJING, Aug. 18 (Xinhua) -- China on Tuesday unveiled a set of measures to unlock the consumption potential of counties and smaller cities, tapping into the vast lower-tier markets as a new source of domestic demand and economic growth.

The government calls for upgrading consumption channels in counties, including renovating township commercial centers, rural markets and local fairs, encourages domestic and international brands to open regional debut stores, and promotes the revitalization of existing land resources to improve services, according to a guideline jointly issued by the Ministry of Commerce and other authorities.

The guideline urges better services that cater to the elderly and children, more efficient urban-rural distribution networks, and stronger county-level employment, as well as more channels for residents to increase their incomes.

The measures come as China seeks to give consumption a bigger role in driving economic growth.

The lower-tier markets, generally referring to third-tier and smaller cities, counties, townships and rural areas, account for about 70 percent of China's population and 60 percent of total retail sales of consumer goods.

The lower-tier markets have diverse needs across different levels, said Shen Bing, a researcher at an institute under the National Development and Reform Commission (NDRC), noting that this diversity can provide broad room for businesses to develop new service models while creating new momentum for consumption.

Official data showed that retail sales of consumer goods in rural areas rose 2.4 percent year on year in the first seven months of 2026, 1.3 percentage points faster than in urban areas. County- and township-level retail sales were estimated to account for nearly 40 percent of the country's total.

China's 2,800-plus county-level administrative divisions form a vast and diverse domestic market, said Chen Xi, a researcher with the NDRC, noting that consumption upgrade is gradually extending from major cities to county-level markets, providing an endogenous source of consumption growth.

For businesses, China's county-level markets are becoming a strategic growth area as consumers seek a wider range of products and services closer to home.

Jiajiayue, a supermarket chain that originated in east China's Shandong Province, has spent years expanding its presence in county-level markets. Of the group's nearly 18 billion yuan (about 2.65 billion U.S. dollars) in revenue in 2025, about half came from county-level markets.

"We have more than 1,000 stores across the country, about 60 percent of which are rooted in county-level markets," said Wang Peihuan, chairman of Jiajiayue Group. Given the broad and diverse nature of county-level markets, the company has expanded beyond supermarkets in recent years, developing a range of formats, including snack stores and bakeries, to cater to local consumers, Wang said.

Lower-tier markets have become fertile ground for fast-growing consumer brands. In 2025, MIXUE Group, a beverage chain operator, had 32,000 stores in third-tier and smaller cities, accounting for about 58 percent of its total stores on the Chinese mainland.

Even international brands are moving deeper into these markets, with Sam's Club and Starbucks making county-level markets an increasingly important part of their growth strategies.

"Compared with cities, county-level markets generally have lower costs for rent and labor, which can translate into higher returns on investment," said Chen Liping, a professor at the Capital University of Economics and Business, adding that residents in county-level areas, facing lower costs for housing and transportation, also show stronger consumption willingness and resilience.

The trend is expected to strengthen. Consulting firm McKinsey estimates that by 2030, about 66 percent of China's incremental personal consumption will come from lower-tier markets, including third-tier and smaller cities as well as county and township areas.

As chain supermarkets expand into rural areas, popular brands open more stores in counties, and local specialty industries attract more visitors and consumers, experts believe China's vast lower-tier markets will play a greater role in shaping the country's consumption landscape and injecting fresh momentum into domestic demand.