China is ramping up its efforts to fuel economic growth by boosting domestic consumption, as outlined in a recent government work report submitted to the national legislature. The report emphasizes expanding domestic demand and improving investment efficiency as key drivers of the economy.
In a significant move, policymakers have announced the issuance of 300 billion yuan ($41.7 billion) in ultra-long-term special bonds to support a nationwide consumer goods trade-in program. This initiative aims to stimulate consumption by encouraging consumers to upgrade their purchases, thereby driving economic activity.
Li Yunze, head of the National Financial Regulatory Administration, highlighted the importance of tailoring financial products to meet diverse consumer needs. Speaking after the opening meeting of the third session of the 14th National People’s Congress, Li mentioned that financial institutions would be encouraged to raise credit limits and extend loan terms for long-term, high-value consumption.
Beijing is also focusing on expanding access and reducing restrictions in key sectors such as healthcare, elderly care, childcare, and domestic services. This strategic shift aims to foster multi-faceted consumption growth, moving beyond big-ticket purchases to a broader range of service consumption.
\"China's strategy in recent years has focused on expanding domestic demand. While boosting big-ticket purchases remains important, there is a growing emphasis on service consumption, which marks a significant shift,\" said Zeng Gang, director of the Institute for Urban Development at East China Normal University.
In addition to traditional consumption drivers, Chinese authorities are aiming to stimulate new consumption trends by fostering digital, green, and smart consumer markets. These efforts are part of a comprehensive package of stimulus measures that have already shown positive results.
In 2024, these measures contributed to continued momentum in consumer spending. Final consumption expenditure accounted for 44.5 percent of economic growth, adding 2.2 percentage points to China’s GDP. Additionally, service consumption grew rapidly, with per capita spending on services reaching 13,016 yuan, marking a 7.4 percent increase from the previous year.
As China navigates the complexities of global economic dynamics, its commitment to boosting consumption underscores the nation’s strategy to achieve sustainable and inclusive growth, positioning itself as a resilient and adaptive economy in the face of global challenges.
Reference(s):
China boosts consumption with new stimulus push, eyes services boom
cgtn.com
