After the blow to the economy after the American sanctions, China announced a „special action plan“ to boost consumption.
Notably, other factors, including COVID-19 and the property sector economic downturn, also contribute to the decreased demand for production. Deflation—the constant reduction in prices—plays an additional role. This creates a problem because it pushes consumers to spend less and wait for prices to drop lower.
According to the General Office of the Central Committee, the plan includes a rise in consumption and domestic demand, as well as enhancing consumption abilities by boosting income and pension, bettering health insurance, and reducing burdens. Apart from this, the project includes expanding the tourism sector and aims to turn cold regions into winter tourism destinations. This will be aided by unilateral visa-free programs for certain countries and facilitating entry into the country. According to Chinese officials, despite the plan not having „anything too new“, it has written up specific actions that the local governments should follow.
Fulfilling the announced plan is important in another way, too: it will reduce Chinese dependency on exports and investments and turn the economy into a consumption-driven one.
It is also interesting that the consumption of Russian goods has increased in China – some shops sell sweets or toys made in Russia and present themselves as spreading not only the consumption of Russian goods but also Russian culture. Said shops have turned up in the country after 2022, which could be caused by the warming relations between the two countries after Russia invaded Ukraine.
