China’s ‘two sessions’ 2024: doubling tax-free allowance will ‘dare people to spend’, delegate says

National People’s Congress delegate Zhang Xuewu says he will put forward a proposal to double China’s tax-free allowance to 10,000 yuan (US$1,389) per month

Consumption has been the major driver for China’s post-pandemic rebound, contributing 82.5 per cent of gross domestic product growth last year

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Consumption contributed 82.5 per cent of China’s gross domestic product last year, marking a 43.1 percentage point increase from a year earlier, according to the National Bureau of Statistics. Photo: Xinhua

Published: 9:30pm, 4 Mar 2024Updated: 6:13pm, 5 Mar 2024

A proposal to double China’s tax-free allowance to 10,000 yuan (US$1,389) per month would “dare people to spend”, according to delegates at the ongoing “two sessions”, with boosting consumption seen as “key to a sustained economic rebound” this year.

National People’s Congress (NPC) delegate Zhang Xuewu, who is chairman of snack giant Yanker Shop Food, told the Shanghai-based The Paper on Sunday that he would put forward the proposal to free up disposable income.

“Resuming and expanding consumption is the key to a sustained economic rebound in 2024,” Zhang said.

“[The government] should raise residents’ expectations for disposable incomes and boost consumer confidence, so that people dare to spend.”

China’s tax-free allowance of 5,000 yuan per month has been in place since 2018.

The government should also expand tax deductions to unlock the spending power of middle-income earners, while Zhang called for an increase in the minimum wage and subsidies for low-income groups.

Consumption has been the major driver for China’s post-pandemic rebound, with the world’s second-largest economy battling an ongoing real estate crisis and a fall in external demand.