China’s state planner on Monday released a notice outlining measures to expand the country’s consumption, as the post-Covid recovery in the world’s second largest economy runs out of steam.
The National Development and Reform Commission urged local governments to ease car purchase restrictions and roll out measures to stimulate new car purchases. It told local officials to promote the use of electric vehicles in the countryside and upgrade EV charging infrastructure, including the construction of battery replacement stations.
The state planner also pushed for the consumption of home appliances by rolling out trade-in and recycling measures. Local governments could offer subsidies for rural consumers to buy and trade in home appliances, it said in the notice.
China’s consumption-drive recovery tapered in recent months after the initial strong rebound at the start of the year. China’s retail sales, a key metric for the nation’s consumption, slowed to a 3.1% on-year increase in June from May’s 12.7% growth.
The state planner said it would speed up approvals of movies, shows, sports events and other performances to stimulate sports and entertainment spending. It also called for a better implementation of a paid-leave system to promote traveling and the nation’s tourism, which is one of the bright spots in domestic consumption this year.
The NDRC said it would push ahead with the renovation of old residential buildings by using special funds and housing provident funds, as well as carrying out shantytown renovation in the biggest cities. It would also renovate dilapidated houses in rural China. It also encouraged the construction and renovation of shopping malls, markets and convenience stores in rural areas to boost spending among local residents.
The state planner is also allowing consumption-related projects to raise funds from real estate investment trusts, and asked financial institutions to cut interest rates on credit cards and consumption loans, while lending more to the consumption sector.
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