China’s commerce ministry has recently released a series of policies aimed at bolstering domestic consumption. While the measures do not constitute significant stimulus, they highlight the limited options available to Beijing in jumpstarting the country’s faltering economic growth.
The policy package, which has been approved by China’s cabinet, primarily aims to support household consumption in sectors closely linked to the struggling property market, such as home appliances, furniture, textiles, and decorations.
This announcement comes on the heels of official data revealing that China’s economy experienced minimal growth in the second quarter compared to the first quarter, while youth unemployment reached a new high in June. Weak domestic consumption and business confidence, along with declining exports, a prolonged property slump, and a mounting government debt, all contribute to a gloomy economic outlook for China.
To encourage domestic consumption, Beijing plans to assist companies in the development of green, smart, and age-friendly household products. Additionally, Chinese homeowners are being incentivized to decorate and upgrade their houses with government support and business promotions. Extra subsidies will specifically be provided to rural residents.
The National Development and Reform Commission, China’s top economic planner, announced that further policies will be rolled out soon. These upcoming measures will focus on encouraging big-ticket purchases and boosting consumption in rural areas.
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