New plan in place to boost consumption

China's latest push to boost consumption — a top priority on the country's policy agenda for the year ahead — is expected to shore up consumer confidence, unleash domestic demand potential and inject strong momentum into high-quality economic growth, said government officials and experts.

Their comments came as the General Office of the Communist Party of China Central Committee and the General Office of the State Council, China's Cabinet, issued a special action plan on Sunday to vigorously boost consumption, stimulate domestic demand across the board and increase purchasing power by raising salaries and strengthening employment support.

Li Chunlin, deputy head of the National Development and Reform Commission, said the plan places an emphasis on stepping up policy support on the demand side, such as promoting reasonable wage growth, and improving minimum wage standards in a scientific and reasonable manner.

It also includes expanding property income channels through measures to stabilize the stock market, Li said at a news conference in Beijing on Monday, adding that the country will increase the diversified supply of health, eldercare and childcare services to reduce financial burdens on households.

China will issue ultra-long term special treasury bonds totaling 300 billion yuan ($41.4 billion) to support the expansion of the consumer goods trade-in program in 2025, compared with last year's 150 billion yuan allocated for the campaign, Li added.

He said sales of new energy vehicles nationwide reached 1.34 million units in the first two months, up 26 percent year-on-year, while turnover of home appliances featuring the highest level of energy efficiency surged 36 percent to 24.1 billion yuan.

The country has announced a raft of measures to expand the scope of the consumer goods trade-in program this year, including new subsidies for purchasing digital products like smartphones, tablets, smartwatches and wristbands, as well as the increased number of categories for home appliances.

Li also emphasized the significance of improving the consumption environment to strengthen spending appetites, and leveraging cutting-edge artificial intelligence technology to foster new consumption growth points.

The action plan stated that China will accelerate the development and application of new technologies and products such as autonomous driving, smart wearables, ultra-high-definition video, brain-computer interfaces and robotics to create new high-growth consumption sectors, according to the plan.

Li Gang, director-general of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce, said more efforts will be made to promote the development of service-based consumption and nurture diversified purchasing scenarios and new types of consumption to further stimulate buying sentiment and unleash consumption potential.

The Ministry of Finance has vowed to increase fiscal spending in areas such as healthcare, education, eldercare and employment to alleviate financial burdens on households and boost consumption capacity.

The National Bureau of Statistics said retail sales, a major indicator of the country's consumption strength, climbed 4 percent year-on-year during the January-February period, after a 3.7 percent rise in December. Online retail sales jumped 7.3 percent year-on-year in the first two months.

"Consumption is playing an increasingly important role in bolstering growth," said Zou Yunhan, deputy director of the Macroeconomic Research Office at the State Information Center's Department of Economic Forecasting, adding China's consumer market is poised for steady growth this year fueled by a series of supportive measures.

Zou said new business forms and new models related to consumption can better meet people's demand for consumption upgrades and stimulate their purchasing enthusiasm, which will provide new impetus and strong support for sustained growth of the economy.

Zhu Keli, founding director of the China Institute of New Economy, said the action plan, as a top-level guideline boosting consumption, will be conducive to bolstering economic transformation and upgrading, and fostering a new development pattern.

Zhu said the initiative focuses on optimizing the consumption environment and improving the buying experience so as to boost people's willingness and ability to purchase goods and services amid downward pressure and external uncertainties, adding that the country's consumption-boosting efforts will lay a solid foundation for sustained and healthy economic growth.