Tongren, China – March 13, 2025 – Prosecutors will explain to consumers how to purchase qualified products at a supermarket in Supan, Yupindon Autonomous County, in Tongren, southwest Gituo county, on March 13, 2025.
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China announced a “special action plan to increase consumption” on Sunday in support of domestic consumption in the world’s second largest economy.
According to Google Translation of the report, the general committee of the Central Committee, the direct branch of China’s ruling party, said it was to increase consumption capacity by actively increasing consumption, expanding domestic demand, increasing revenue and reducing burdens.”
The broad release outlined other steps, such as taking “multiple measures” to stabilize the stock market and developing more bond products suitable for individual investors.
China’s CSI 300 index and Hong Kong Hangsen index It rose slightly on Monday, registering a profit of around 0.1%.
This was named as the biggest task of the year, a week after Chinese Prime Minister Li Qiang submitted an annual report on government work.
At the time, Chinese policymakers increasingly acknowledged the need to counter the pressures of deflation at home.
China is currently slowing its consumer landscape, with the latest consumer price index in February recording the producer price index in the sharpest decline and contraction area since October 2022.
The plan, released on Sunday, also called for support to promote inbound tourism and domestic tourism, was planned to be awarded to ice and snow areas, and to support the development of the globally recognized winter tourism destination. One-sided, visa-free arrangements will be expanded and local immigration policies will be optimized.
The plan “appears to include nothing too new, but we set this as an action plan to show that concrete steps will follow at the local level.” Lynn Song, Chief Economist at Greater China, told CNBC.
More importantly, she said the plan demonstrates China’s commitment to addressing long-term structural issues, including slowing wages and the impact of negative wealth from real estate and stock markets.
The plan calls for action to increase incomes for both urban and rural residents, and will include farmers who will continue to implement employment support plans and unemployment insurance.
The song states, “These are likely to be multi-year directions rather than being revisable in a few months. Directionally, it is very encouraging that policymakers have a calm look at these themes and should help with the long-term transition to a consumer-driven economy.”
“As they say, Rome was not built in a day – neither was it byd And China’s EV dominance – many of China’s major policy directives take time to bear fruit, and this document plantes seeds for the long-term development of the consumer industry,” Song said.
In March, Chinese policymakers said that given the potential “new shock” to overseas demand, China must focus more on domestic demand, according to Shen Danyan, director of the government’s labor report drafting group and director of the State Council’s Research Bureau.
Chinese leaders also pledged an additional 300 billion yuan (4.145 billion) of super-finance ministry debt at their annual parliamentary meeting in January to support consumer subsidies.
Richard Harris, chief executive of investment management firm Port Shelter Investment Management, told CNBC’s Squawk Box Asia that Chinese authorities really have to focus on revising the domestic economy.
“The authorities are determined to stimulate the economy and maintain it, and to move forward with the domestic economy, even if there are some issues that are found on the export side of the economy.
– Anniek Bao of CNBC contributed to this report.
