HONG KONG (Reuters) -China’s State Council unveiled on Sunday what it called a “special action plan” to boost domestic consumption, featuring measures including increasing residents’ income and establishing a childcare subsidy scheme. The plan comes as levels of consumer demand in China have suffered various setbacks in recent years, due to factors such as COVID-19 […]
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China looks to boost consumption amid consumer squeeze
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HONG KONG (Reuters) -China’s State Council unveiled on Sunday what it called a “special action plan” to boost domestic consumption, featuring measures including increasing residents’ income and establishing a childcare subsidy scheme.
The plan comes as levels of consumer demand in China have suffered various setbacks in recent years, due to factors such as COVID-19 disruptions and a prolonged property slump, chilling the propensity of households to spend and adding to deflationary trends.
The plan was issued to all regions and departments to “vigorously boost consumption, expand domestic demand in all directions, improve consumption capacity by increasing income and reducing burdens,” a report from the Council said.
The plan comes a week after Chinese Premier Li Qiang’s work report to the National People’s Congress which focused on boosting household spending to cushion the impact of weak external demand.
Pressure has been building on Chinese officials for consumer-focused stimulus measures to fend off deflationary pressures and reduce the world’s second-largest economy’s reliance on exports and investment for growth.
The plan released on Sunday called for increasing urban and rural incomes and said farmers’ incomes should be boosted by measures such as housing reforms.
The action plan was wide-ranging but was limited in promising concrete resources to support local governments as they formulate actual measures to implement the plan.
The plan also envisaged measures to stabilize the stock market but gave no details on when and how this could happen.
Authorities should “study and establish a childcare subsidy system,”, as well as implement flexible employment and the opening of paediatric outpatient clinics at night in general hospitals. Community and employer-run childcare services are also to be encouraged.
Workers’ rights and vacation days must be guaranteed and paid annual leave and short holidays should be encouraged. Financial subsidy standards for urban and rural residents’ basic pensions are also to be increased.
There were also proposals to boost tourism such as expanding the number of countries whose travellers don’t need visas.
(Reporting by Farah Master and the Beijing newsroom; Editing by David Holmes)