China’s Special Action Plan to Accelerate Consumption-Driven Economic Growth
China has unveiled a special action plan to enhance consumption to support economic growth. Key strategies include boosting income levels, easing expenditure pressures, improving service quality, and providing fiscal and financial support. This comprehensive approach is aimed at transforming the economy into one driven by consumer spending and market potential.
China has recently implemented a special action plan designed to boost consumption, aimed at promoting income growth, enhancing consumer capacity, and removing barriers to consumption. This comprehensive policy package introduces strategic measures for improving institutional mechanisms, thereby unlocking new market potential and facilitating a transition to a consumption-driven economy.
The action plan prioritizes income enhancement through a multi-faceted strategy that includes reasonable wage growth, expanded channels for property income, and initiatives to improve rural incomes. Additionally, resolving payment arrears is a key focus to improve consumption flow and support economic circulation.
According to Wang Jingwen, director of the Macro Research Center affiliated with the China Minsheng Bank Research Institute, healthy market development is essential. He notes that efforts to stabilize the capital market and real estate have been prioritized since September 2024, reflecting the government’s commitment to enhancing residents’ consumption capacity through this plan.
Former Deputy Director of the Development Research Center of the State Council, Liu Shijin, emphasizes the need to enhance urban and rural pensions, proposing a significant increase over the next five years. This change is expected to release over 1 trillion yuan in consumption potential, contributing approximately one percentage point to annual GDP growth.
The plan also seeks to alleviate spending pressures to increase consumer willingness. This includes protecting the rights of flexible workers and rural migrants regarding healthcare, childcare, and elderly care, thereby supporting their economic participation and consumption behavior. Noteworthy measures include expanding educational resources, improving insurance access, and strengthening assistance for low-income households.
Lu Ming, a distinguished professor at Shanghai Jiao Tong University, underscores the importance of equalizing access to public services in populous cities to drive growth. He highlights the urgency of establishing a unified national pension system to ensure labor force mobility and protect the rights of migrating populations.
The special action plan also focuses on enhancing the quality of service consumption, which includes optimizing elderly and childcare services and promoting various daily-life services. This approach seeks to align with the increasing consumer interest in cultural events and services, as observed in recent trends of growing demand for such experiences.
Wang Chengfang, president of Anhui provincial domestic service industry promotion association, advocates for community-embedded services, which cater to both elder care and childcare. This initiative not only provides employment opportunities for community members but also addresses significant market demands in these sectors.
In addressing housing consumption and automotive markets, the plan proposes actions to upgrade big-ticket consumption, such as consumer product trade-in programs and efforts to better align housing supply with consumer demand. Wu Jing suggests that the outlined measures represent a significant step in stimulating housing-related consumption, which is vital to the broader economic landscape.
The action plan also forecasts strong fiscal and financial policy support, proposing increased treasury bonds and expanded investments in essential sectors like education and healthcare. These financial incentives aim to create synergies in pro-consumption policies, with the expectation of introducing additional incremental measures to further stimulate consumer spending.
Experts like Zhang Bin and Tian Lihui have commented on the transformative potential of proposed financial measures, including consumer loan interest discounts, to stimulate both supply and demand within markets. Their insights suggest an innovative approach to enhance consumption through new financial products and digital payment systems.
The special action plan introduced by China is a comprehensive initiative aimed at stimulating consumption and supporting economic growth. By enhancing income levels, alleviating expenditure pressures, and improving service quality, the plan seeks to unlock market potential and transition toward a consumption-driven economy. With stakeholder perspectives emphasizing the need for supportive fiscal and financial policies, the successful implementation of these measures holds significant promise for bolstering consumption and overall economic resilience.
Original Source: asianews.network
Post Comment