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China’s government is taking bold steps to boost domestic consumption. The Chinese authorities have unveiled a new stimulus package. This crucial initiative is expected to prop up the national economy.
On March 16, China introduced a new policy document titled Special Action Plan for Stimulating Consumption. Analysts believe this move signals the government’s strong commitment to boosting domestic spending.
The Central Committee under China’s ruling party emphasized that the new plan focuses on actively promoting consumption, expanding domestic demand, and unlocking consumer potential through income growth. The only question is whether everyone will be able to increase their income.
The document outlines several key measures, including stabilizing the stock market and developing additional bond products tailored for individual investors. Earlier, China’s Premier Li Qiang presented the government’s annual report, in which stimulating consumption remains a top priority for 2025.
At present, China’s domestic consumption is stagnating. For example, the Consumer Price Index (CPI) recorded a sharp decline in February, marking the biggest drop in a year. Meanwhile, the Producer Price Index (PPI) has been stuck in negative territory since October 2022.
The new government plan also includes support for foreign and domestic holidaymakers. The tourism framework is expected to expand unilateral visa-free agreements and improve regional entry policies.
"Although the proposed program does not introduce anything fundamentally new, its presentation as an action plan suggests that authorities are ready to take concrete steps," Lynn Song, Chief Economist at ING, sums up.
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