Everything China is doing to juice its flagging economy
A flurry of statements from the government and Communist Party since July have largely focused on encouraging more spending on things like consumer goods and cars, coaxing private companies to expand investment, and making it easier for businesses to access funding.
But even with two interest rate cuts this year, Beijing isn’t unleashing the kind of monetary and fiscal stimulus implemented during past downturns. President Xi Jinping’s government is reluctant to give the kind of cash handouts to consumers that fueled post-pandemic recoveries in the US and elsewhere.
And debt-laden local governments in China don’t have the fiscal space for a major boost to spending.
Consumer Goods
Thirteen government departments outlined a plan on July 18 to boost household spending on everything from electric appliances to furniture. Local authorities are encouraged to help residents refurbish their homes, and people should get better access to credit to buy household products, according to the measures announced.
On July 28, three government agencies outlined a plan to increase manufacturing of small consumer goods — or the so-called light industry sector, which makes up more than a quarter of China’s exports.
Steps will be taken to increase sales of green and smart home goods in rural areas, and expand the use of battery products in electric cars, power stage and telecommunications. An exchange dedicated to helping small firms get access to funds will also be expanded.
The National Development and Reform Commission, China’s top economic planning agency, released a comprehensive document on July 31 repeating many of the pledges so far.
