China plans to enhance local consumption in the hope of recovering the economy

In light of what suffers from the second largest economy in the world, the government continues to work with driving plans forward as it calls on the authority responsible for government planning to make efforts to “increase purchasing power” and encourage the development of products and scenarios that will encourage consumers to spend but not to support all forms of shopping, according to the American CNBC network.

The importance of stimulating the Chinese economy

Economists have long called on economists to calibrate the structure of the income distribution system and policies that they see as necessary to stimulate local consumption in a meaningful way because this is an important economic engine for the second largest economy in the planet, and therefore, the last step that China has taken to promote consumption is not aimed at shocking all kinds of spending but rather supporting some of it.
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Barter and support support program

Last week, policymakers doubled support for the consumer barter program to 300 billion yuan (41.47 billion dollars) this year 2025, which corresponds to the market expectations – to avoid cash.
Observers say that the subsidies will go to about 15% to 20% of the purchase price for selected products, including medium -term smartphones and home appliances.
This represents an expansion of last year’s program of 150 billion yuan, which was announced in the summer of a narrower range of products.

What analysts say?

“The new round of subsidies is very large and is likely to support retail sales similar to the increase in e -commerce companies in sales of certain products in late last year,” said Jacob Cook, co -founder and CEO of “WIC Marketing Plus Technology.
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Although there are doubts that the one -time support effect will not last long, Cook said more support programs are likely to follow.
He added that the goal of growth for China by 5% and giving priority to consumption indicates that Beijing will make more efforts to support growth without relying heavily on the old rules of spending on infrastructure.

Chinese State Council statements

Last week, Chinese head of State Lee Qiang presented a annual report on the work of the government indicating consumption as the first task for the next year.

Consumption priority

“This is the first time in a decade that Beijing gives consumption a high priority,” said Laura Wang, Chinese stock strategy in Morgan Stanley.
Wang added: “The government’s work report mentioned consumption 27 times, which is the largest number of references in a decade,” Wang added.
Although Beijing did not follow the example of the United States or other countries in distributing cash money to consumers, Chinese policy makers have increasingly realized the need to face default pressures at home.

Chinese local demand

“China must focus more on local demand in light of the possibility of new shocks for external demand,” Shin Dan Yang, head of the government work report and director of the State Council Research Office.

Retail sales in China

China’s retail sales recorded a growth of 3.5% last year, which is a sharp slowdown compared to a growth of 7.2% in the previous year.
In reference to a continuous decrease in demand, the rate of inflation in consumer prices in China in February decreased below zero for the first time in more than a year.