China’s State Council Unveils Plan to Bolster Domestic Consumption
China’s State Council has launched a plan to boost domestic consumption through income increases and childcare subsidies against a backdrop of declining consumer demand. The initiative aims to alleviate financial burdens and stimulate household spending in response to deflationary risks and weak external demand.
China’s State Council has introduced a “special action plan” aimed at bolstering domestic consumption, particularly through increasing residents’ income and implementing a childcare subsidy scheme. This initiative responds to a decline in consumer demand due to disruptions from COVID-19 and a sustained property market decline, which have diminished households’ willingness to spend, contributing to deflationary trends.
The action plan outlines strategies to “vigorously boost consumption, expand domestic demand in all directions,” and enhance consumption capacity by raising incomes and alleviating financial burdens on consumers. It emerges following Premier Li Qiang’s work report, which emphasized increasing household spending to mitigate the effects of weak external demand.
Chinese officials are under pressure to implement consumer-centric stimulus measures to combat deflationary pressures and lessen the economy’s dependency on exports and investments. The plan advocates raising urban and rural incomes, particularly targeting farmers through housing reform measures. However, while the plan is broad in scope, it provides limited concrete resources for local governments.
The action plan suggests establishing a childcare subsidy system, promoting flexible employment, and enhancing nighttime paediatric outpatient services in hospitals. It also emphasizes guaranteeing workers’ rights and encouraging benefits such as paid annual leave and vacation days. Further, it includes proposals to enhance tourism by increasing the number of countries exempt from visa requirements for travelers.
The newly introduced “special action plan” by China’s State Council seeks to enhance domestic consumption while addressing continuous economic challenges. Key features include increasing residents’ income, instituting a childcare subsidy scheme, and advocating for workers’ rights. Although the plan is comprehensive, it lacks specific details on resource allocation for local governments, highlighting a critical area needing attention for effective implementation.
Original Source: www.usnews.com
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