China will take steps to revive consumption by boosting people’s incomes, the official Xinhua News Agency reported on Sunday, citing a statement from the State Council.
Other measures include stabilizing the stock and real estate markets, and offering incentives to raise the country’s birth rate, as the government tries to ease the deflationary pressures afflicting the economy.
Beijing will promote “reasonable growth” in wages and establish a sound mechanism for adjusting the minimum wage, Xinhua reported. It will also look at setting up a childcare subsidy system, as well as strengthening how investment can support consumption.
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Invigorating consumption has been a challenge for the government since the end of the pandemic. Retail sales have been anemic while consumer prices fell into deflation in February for the first time in over a year.
At annual parliamentary meetings this month, the country’s leadership made boosting consumption their top priority for the first time since President Xi Jinping came to power over a decade ago.
Chinese stocks rallied the most in two months on Friday after the State Council, China’s cabinet, announced that officials from the finance ministry, the central bank and other government departments plan to hold a press conference Monday on measures to boost consumption.
Other highlights of the plan:
- Enlarge variety of bond-related products suitable for individual investors
- Adopt multiple measures to promote increase in farm incomes
- Raise financial help for some students
- Appropriately increase the basic pension for retirees
- Ensure timely and full distribution of unemployment benefits
- Support tourist attractions in expanding services and the reasonable extension of business hours
- Support opening of duty-free shops in cities where conditions permit
- Boost support for trade-in programs
- Lower the interest rate on housing provident fund loans at an appropriate time
- Scale back restrictions on consumption in an orderly manner
- Accelerate the development of new technologies and products such as smart wearables and autonomous driving