China’s big plan to boost domestic consumption in midst of US trade war
- Beijing’s measures include improving commercial pedestrian streets and encouraging night markets and entertainment
- Plan also calls on exporters to shift focus to products they can sell in the domestic market
China has unveiled a series of measures to try to boost consumer spending and focus exporters on the domestic market as it continues to battle the United States over trade.
In an official policy document published on Tuesday, the State Council, China’s cabinet, listed 20 measures to help improve domestic consumption, from improving commercial pedestrian streets to encouraging night markets.
The announcement, dated August 16, comes after retail sales growth slowed to 7.6 per cent in July from a year earlier, a sharp slowdown from 9.8 per cent growth in June, according to data from the National Bureau of Statistics (NBS). In real terms, the growth was even lower at 5.7 per cent last month.
China’s economic growth slowed to 6.2 per cent in the second quarter from 6.4 per cent in each of the previous two quarters.
Without specifying, the document said factors at home and abroad had resulted in consumption bottlenecks and shortcomings, including an insufficient supply of goods and services.
It said traditional retailers and distributors had a great deal of room to innovate and there was still potential to be tapped in both urban and rural consumption.
The new measures include directing e-commerce companies to partner with factories to customise production designs to improve sales; remodelling struggling department stores; turning old sports stadiums and old factories into shopping malls and entertainment centres; giving facelifts to commercial pedestrian streets; and speeding up the development of convenience store chains.
Beijing also called on Chinese exporters, many of whom are caught in the middle of the US-China trade war, to develop their own branded products and expand their domestic sales channels to sell them.
At the same time, the central government wants to expand the cross-border e-commerce import business to more Chinese cities to meet demand for high-quality foreign goods.
Some of the measures were included in previous economic stimulus efforts and have already been rolled out in some cities, including a plan to provide incentives for consumers to buy new hi-tech household appliances.
For instance, in July, Beijing’s municipal government released 13 measures to build a “thriving night economy”, including extending operating hours for tourists sites, subsidising tickets for performances, and developing distinctive night shopping markets for each of the city’s 16 districts.
To improve weak car sales, the central government said areas that restricted car purchases should consider gradually relaxing them. Even in cities that limited car registrations to control air pollution, local governments should allow sales of used cars that met the government’s minimum emission standards, the State Council said.
As one of the big drivers of overall consumption, car sales have underperformed so far this year, with sales falling 2.6 per cent in July from a year earlier, according to the NBS. In the first seven months of the year, car sales grew only 0.6 per cent from a year earlier.
