China outlines plan to boost consumption
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The news: China’s State Council announced a “special action plan” to boost domestic consumption as the country faces deflationary pressures and weak consumer demand.
The context: The plan includes measures to increase wages, establish a childcare subsidy system and stabilise the stock and real estate markets.
Other initiatives involve raising pensions, expanding financial aid for students, supporting tourism and easing restrictions on consumption.
The plan, issued to all regions and departments, aims to “vigorously boost consumption, expand domestic demand in all directions, improve consumption capacity by increasing income and reducing burdens,” a report by the Council said.
However, it does not include new funding from the central government, leaving implementation to local governments already burdened by debt.
A news conference with officials from the finance ministry, the central bank and other government departments is planned for Monday to provide further details.
The numbers: Chinese stocks rallied on Friday after the Council, China’s cabinet, scheduled a press conference with officials from the finance ministry, commerce ministry, central bank and other government bodies for Monday, 3:00 pm local time (6:00 pm AEDT).
The sources: Xinhua via China’s State Council, Reuters, Bloomberg
