An action plan to vigorously boost consumption was issued on March 16 by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council. The action plan proposes a total of 30 policy measures in eight categories, including initiatives to increase the incomes of both urban and rural residents, improve the quality of goods and services, rectify measures restricting consumption and improve policies supporting consumption. 

Consumption not only drives economic development, but also fulfills people's aspirations for a better life. Across the globe, China has been the world's second largest consumer market and the largest online retail market for more than a decade. The consumption demand and structure of the people in China constantly upgrade, the proportion of the service consumption expenditure continues to increase, and new market space expands.

However, the growth of consumption in recent years shows that domestic consumer confidence is not strong enough, and there is large scope for the improvement of the conditions facilitating consumption. In this context, the Chinese Government has issued the latest action plan with the aim of stimulating consumption in line with the policy goals of enhancing consumption ability through increasing incomes and reducing burdens, creating effective demand through high-quality supplies and enhancing consumption willingness through creating an environment more conducive to consumption.

The recent action plan highlights efforts in three aspects: increasing incomes, reducing burdens and improving quality.

Income is the foundation and premise of consumption. The action plan proposes to promote reasonable wage growth, expand property income channels, take multiple measures to increase rural residents' incomes and effectively solve the problem of payments in arrears.

Reducing burdens and increasing incomes together promote consumption ability and willingness. The action plan focuses on providing better services in healthcare, eldercare and childcare, with an aim of reducing financial burdens on households, alleviating the rigid expenditure pressure of urban and rural residents and unleashing resident willingness to spend.

The action plan proposes an initiative to improve the quality of service consumption, including measures optimizing service supplies to the elderly and children, expanding consumption in lifestyle services, culture, sports and tourism, and steadily advancing opening up of the service sector.

Unlike the past practice of stimulating consumption through short-term subsidies, the latest action plan aims to activate the long-term engine of consumption. It is not only an important stimulus for short-term economic recovery, but also a key measure for long-term economic restructuring and high-quality development. The upgrading and expansion of consumption will drive the development of related industries, promote the upgrading of industrial structures and transform the investment-driven economic growth pattern to a consumption-driven one.

With full implementation of the action plan, China's consumer market will experience great changes in 2025. This action plan is crucial to the country's economic recovery and is an important measure for achieving high-quality development. BR

Copyedited by G.P. Wilson

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