The Chinese government and the Communist Party jointly issued a lengthy list of planned initiatives on Sunday to get people to spend more, in yet another move by Beijing to offset potential harm from its escalating economic warfare with Washington.
The road map for economic stimulus included larger pensions, better medical benefits and higher wages — measures that could bolster China’s lagging domestic consumption. But it assigned many of these tasks to the country’s local governments, many of which are struggling under enormous debts and plummeting revenues from the sale of state land.
The action comes as China’s leaders are searching for ways to rebalance the economy away from its current dependence on an ever-rising trade surplus, which reached almost $1 trillion last year. President Trump has already imposed 20 percent tariffs on China’s shipments to the United States. Countries in Europe, Latin America, Africa and the Middle East are also raising tariffs on China’s flood of manufactured-goods exports.
Part of the document released on Sunday seemed aimed at reassuring the Chinese public that their investments were safe, so that they would start spending money again. The authorities promised to undertake “multiple measures to stabilize the stock market” and to underpin the real estate market, which has been marred by falling property prices.
A housing market crash has wiped out much of the savings of China’s middle class in the past three years. Chinese households have responded by curtailing their spending on hotels, restaurants and other services and stuffing savings into bank deposits that pay very little interest.
One bright spot of late for China has been its stock markets. In the United States, the tariffs and uncertainty caused by Mr. Trump’s policies dragged the S&P 500 last week into a correction, down more than 10 percent from its peak. But China’s markets are positive, partly on enthusiasm for the country’s progress in developing its own artificial intelligence programs. Hong Kong’s stock market, where many Chinese companies trade, is up about 20 percent since Mr. Trump’s inauguration.
The “Special Action Plan to Boost Consumption” was issued in the name of two of the highest organs of power in China: the General Office of the cabinet and the General Office of the Central Committee of the Communist Party. The unusual step showed that Beijing’s leaders want to signal that they are serious about addressing lackluster domestic spending.
China’s National Bureau of Statistics has scheduled a news conference on Monday morning in Beijing to release economic data from January and February. Later in the day, senior officials are scheduled to speak at a news conference about the initiatives to increase consumption.
The plan includes many details that could prove popular with the Chinese public if implemented. It calls for local governments to issue payments or increase subsidies to “people in need” and increase retirees’ pension benefits. It also directed local governments to pay their overdue debts to businesses.
But the outline released on Sunday contained no new promises of money from the national government to help local governments pay for all of this.
China’s local governments, which are responsible for almost all social spending, raised most of their money until three years ago by selling state land to private sector developers. But these sales have collapsed because of the housing market crash.
