Chinese officials have announced steps to enhance domestic demand and encourage consumer spending amidst the tariff war initiated by U.S. President Donald Trump, which threatens the country’s exports. The central bank plans to explore new tools for increasing low-cost funding in key consumption sectors, as stated by Che Shiyi from the People’s Bank of China.
On the spending side, the government allocated an initial 81 billion yuan ($11.2 billion) to local governments in January for a rebate program aimed at boosting auto and appliance sales, according to Li Chunlin, the vice chairman of the National Development and Reform Commission. These measures are part of a broader plan to stimulate consumer spending, demonstrating the government’s commitment to reviving a sluggish economy.
New government data showed retail sales increased by 4% in January and February compared to the previous year, exceeding forecasts. Industrial production rose by 5.9%, reported by the National Bureau of Statistics, which helped support Asian stock markets. Despite this, challenges persist both domestically and internationally, with Trump imposing a 20% tariff on Chinese goods and hinting at further tariffs in April.
Fu Linghui, a bureau spokesperson, noted that while the economy is progressing, issues such as insufficient domestic demand and operational difficulties for some companies remain. The real estate market continues to depress consumer confidence, with real estate investment dropping by 9.8% in the first two months of the year. However, price declines have slowed, indicating potential stabilization.
The plan includes initiatives ranging from developing artificial-intelligence products like autonomous driving to promoting winter tourism in snowy regions. It also involves measures to boost spending power by expanding benefits for older people and enhancing rural health insurance.
— news from The Associated Press
