This has been referred to as the most all-encompassing set of measures aimed at increasing consumer expenditure since China initiated its reforms and opened up to the world.
Considering the economic growth over these years, this reflects the scale and aspiration of a 30-point initiative released collectively by the Communist Party's Central Committee and the State Council.
The objective is to rejuvenate slow economic expansion through boosting internal purchasing activities. Following the yearly economic planning meeting held in November, increasing consumer expenditure was established as the leading focus out of nine key economic objectives slated for implementation in 2025.
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This goal has become more urgent amid uncertainty created by a tariff war, trade restrictions and threats by US President Donald Trump. Meanwhile, China's trade surplus reached nearly US$1 trillion last year.
The comprehensive strategy aimed at decreasing reliance on it, coupled with various steps taken recently to boost expenditure, has thus far garnered positive feedback. However, its success hinges entirely on how effectively it is carried out.
To encourage consumers to increase spending, reduce savings, and shift towards an economic growth model driven by consumption, the government must tackle fundamental problems such as boosting workers' actual income levels and fostering a robust and optimistic climate conducive to consumer activity.
Regarding this aspect, the plan appropriately establishes a link between consumer confidence and matters like accessible and cost-effective childcare along with the nation's ongoing housing crisis.
China has established an economic growth objective of approximately 5 percent and now faces increasing pressure to boost domestic spending as a way to counteract the effects of the escalating trade conflict.
The 30-point strategy seeks to "boost people’s confidence in spending and stabilize their expectations," stated Li Chunlin, who is the vice-chairman of the National Development and Reform Commission.
The strategy aims to increase wages and lessen household expenses like childcare and eldercare costs, thereby enhancing people’s self-assurance and eagerness to make purchases.
As per the policy, officials aim to increase employees' earnings through enhanced job opportunities, increasing the lowest salary level, elevating the base retirement benefit, and improving access to healthcare and pension coverage for freelance and contract workers.
Beijing aims to encourage the real estate market to "stabilize and recover from its downturn," as well as implement various strategies to support and stabilize the stock market.
When implementing a comprehensive approach to boost consumer spending as a key driver for economic growth, the responsibility falls on the government to take the initiative.
Therefore, it’s beneficial that there is already recognition of the necessity for a long-term strategy to assist exporters in shifting their focus to the domestic market and adjusting to its distinct consumer tastes and regulatory framework.
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The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.
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