Chinese policymakers, ranging from the central government and National Development and Reform Commission (NDRC) to the Ministry of Commerce (MOFCOM) and the People's Bank of China (PBOC), have been intensively launching stimulus measures to boost consumption and rejuvenate growth momentum over the past two weeks, moves that are seen as a pivot for bolstering the nation's continuous economic recovery and also critical for the world as it encounters lingering headwinds. Observers noted that the measures are carefully drafted, widely applied to all sides concerned and could form a compounded effort in boosting the nation's growth. For instance, incentives for automobiles and electronics consumption are close to people's daily life, the promotion of AI appliances is in line with the nation's determination to promote high-quality growth, and the heavyweight guideline to spur the private economy has injected much-needed confidence into the domestic market. They will further consolidate the foundation for the recovery of the world's second-largest economy, observers added, noting that with more broad-based stimulus to kick in over the next few months, recovery will continue to pick up pace, though challenges remain.
In the latest move to shore up consumption, China announced steps to boost sales of cars and electronics – two areas in which the nation has vast potential. Regions will be encouraged to increase annual car purchase quotas and efforts will be made to support sales of second-hand vehicles, the NDRC said in a statement on automobile consumption. A separate statement on supporting sales of electronics products said authorities would encourage scientific research institutes and market entities to actively apply domestic AI technology to improve the intelligence of electronic products, with a particular focus on rural areas. In recent years, the demand for electronic products has been slow to pick up due to various reasons such as uncertain income expectations due to the pandemic, slower innovation, and disruptions in global supply chains. However, China's rising income levels and network infrastructure indicate that there is still great potential in the market. The increasing trend of smarter products is driving upgrades in consumption, and even rural areas hold significant untapped opportunities, NDRC official Chang Tiewei explained at a press conference introducing the policies.
To boost consumption, policymakers are considering ways to make electronic products smarter and more user-friendly by using the latest technology like AI, Chang said, explaining that they are planning to invest in technology that recognizes different regional dialects and accents, making voice control features more efficient and accessible to people in rural and older communities. These efforts aim to reduce the digital gap, make electronic products more accessible and beneficial to all residents, regardless of their location or background. As the country moves forward, these steps may shape a more advanced and inclusive electronic products market, the official said. In another conference held by the Ministry of Agriculture and Rural Affairs (MARA), Zeng Yande, an official with the Ministry vowed further efforts to "fill farmers' wallets", saying that only with a stable income can people in rural areas “dare to consume”.
The two policies from two ministries form a virtuous circle to boost rural consumption, with support for both the demand and supply sides, and serve as an example of how the nation boosts its economic growth with a sustained growth drive, Zhang Hong, an independent analyst on macro economy, told the Global Times. The measures, such as promoting the use of the new generation of AI, follows years of central government's efforts to build internet infrastructure even in the most remote areas of China, and will provide a sustained growth driver for consumption, Zhang said, adding that China's innovative policy tools are also completely different from those of Western countries, which some foreign media fail to understand. On the macro level, China issued a guideline on boosting the private economy, highlighting that it will ensure that enterprises of different ownership will operate in an arena of fair competition and be protected by the law equally. Domestic firms are now also allowed to take on more foreign debt to stabilize the yuan, which in turn will shore up confidence and support the real economy.
Other supportive measures will soon follow, and some policies rolled out in the first half, such as infrastructure investment, will also take effect in the coming months, Cong Yi, Dean of the School of Marxism at Tianjin University of Finance and Economics, told the Global Times. According to the latest data, China's second-quarter GDP jumped 6.3%, falling short of expectations, but outpacing most of the world's major economies to become the locomotive of global growth. In the first quarter, the U.S., EU, Japan and Brazil reported GDP expansion of 1.8%, 1%, 1.9%, and 4% respectively. This means that China's first half GDP growth still leads major global economies, according to the National Bureau of Statistics (NBS). China will formulate comprehensive policies to further attract foreign investment, expand market access and enhance communication with foreign firms and Chambers of Commerce, in a bid to set up a higher-level opening-up system and attract global resources, Jin Xiandong, an NDRC official, said. In the longer term, the country will continue to provide strong impetus for the recovery and growth of the world economy, and will surely bring more permanent development opportunities for foreign enterprises, Jin noted, as reported by the Global Times.
