China intensifies efforts to stimulate consumer spending amid economic challenges

Published 20/02/2025, 14:24
© Reuters.

Investing.com -- In a response to the ongoing property crisis and potential U.S. tariff increases, China’s Premier Li Qiang announced on Thursday that the country will heighten its focus on boosting consumption and improving people’s livelihoods. This includes implementing more targeted measures to stimulate consumer spending.

This announcement comes at a time when the world’s second-largest economy is experiencing significant pressure on household spending. Top policymakers have committed to enhancing household incomes and consumption throughout this year.

Premier Li Qiang emphasized the importance of consumption in expanding domestic demand and stabilizing growth, as well as its role in transforming the development model in the mid-to-long term. He further stated that authorities will place more emphasis on consumption. This information was reported by state media CCTV from a cabinet session chaired by Li.

As the annual parliamentary meeting in early March approaches, markets and economists are anticipating more stimulus measures. These could include strategies to enhance consumption, especially as China’s robust exports sector faces growing uncertainties with U.S. President Donald Trump’s return to the White House.

To date, the most significant policy step to increase household consumption has been an extended consumer goods trade-in scheme, initiated in 2024. This year, more home appliances and digital goods were added to the program.

According to commerce ministry data cited by CCTV, more than 3.97 million consumers have purchased home appliances under the program as of Wednesday. Additionally, over 26.71 million consumers have registered for subsidies to buy mobile phones, tablet computers, smart watches, and bracelets.

In 2024, sales of cars, home appliances, electric bicycles, and other products under the scheme amounted to 1.3 trillion yuan ($179.10 billion), contributing to a growth in retail sales by more than 1 percentage point.

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