China Outlines Plan to Bolster Consumption in Face of Trump Tariffs

The Chinese government and the Communist Party jointly issued a comprehensive list of planned initiatives on Sunday to stimulate consumer spending, in response to the escalating economic tensions with the United States.

The economic stimulus roadmap includes measures such as increased pensions, improved medical benefits, and higher wages, with a focus on boosting domestic consumption. However, the implementation of these initiatives will largely fall on local governments, many of which are grappling with high debts and declining revenues.

China is aiming to reduce its reliance on trade surpluses, which have come under pressure due to tariffs imposed by President Trump. To reassure the public and encourage spending, authorities have vowed to stabilize the stock market and support the real estate sector.

The housing market downturn in China has eroded the savings of the middle class, leading to reduced spending on various services. Despite this, China’s stock markets have shown resilience, driven by advancements in artificial intelligence programs.

The “Special Action Plan to Boost Consumption” issued by top Chinese authorities underscores the government’s commitment to revitalizing domestic spending. The plan includes measures to provide financial assistance to those in need and enhance pension benefits for retirees.

China’s National Bureau of Statistics is set to release economic data, while officials will discuss strategies to promote consumption. However, the plan lacks new financial commitments from the national government to support local initiatives.

While the plan outlines various support measures, it does not include additional funding from the central government to assist local governments in implementation.

With local governments heavily reliant on land sales for revenue, the collapse of the housing market has posed significant challenges.