China will take steps to revive consumption by boosting people’s incomes

China to Boost Incomes and Stimulate Consumption Amid Economic Challenges

China plans to revive consumer spending by raising incomes, stabilizing financial markets, and offering incentives to increase the birth rate, according to a report from the official Xinhua News Agency on Sunday. The measures, outlined in a State Council statement, aim to counteract deflationary pressures weighing on the economy.

Key Economic Initiatives

The government will promote “reasonable growth” in wages and establish a system for adjusting the minimum wage, Xinhua reported. Officials are also considering the creation of a childcare subsidy program and strategies to strengthen investment’s role in driving consumption.

China has struggled to boost consumer spending since lifting its pandemic restrictions. Retail sales remain sluggish, and in February, consumer prices fell into deflation for the first time in over a year.

At this month’s annual parliamentary meetings, Chinese leaders prioritized consumption growth—marking a shift in economic focus not seen since President Xi Jinping took power over a decade ago.

Market Reaction and Planned Measures

Following the State Council’s announcement, Chinese stocks surged on Friday, marking their biggest rally in two months. The finance ministry, central bank, and other government agencies are set to hold a press conference Monday detailing the country’s economic stimulus plans.

Other Highlights of the Plan:

✅ Expand investment options by offering more bond-related products for individual investors
✅ Increase financial aid for some students
✅ Raise basic pensions for retirees
✅ Ensure unemployment benefits are distributed fully and on time
✅ Support tourism by expanding services and extending business hours
✅ Open more duty-free shops in cities where conditions allow
✅ Scale back consumer restrictions in an orderly manner
✅ Lower interest rates on housing provident fund loans at an appropriate time
✅ Encourage trade-in programs to boost spending
✅ Accelerate development of advanced technology such as smart wearables and autonomous driving

With these measures, Beijing hopes to reinvigorate domestic consumption and strengthen long-term economic stability.