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China again puts domestic demand first, but the payoff will be slow
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Consumers are holding back because of a soft labour market and falling property prices, analysts say.
PHOTO: REUTERS
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- China prioritises boosting domestic demand for the second year, focusing on household consumption to rebalance growth away from exports amid economic pressures.
- Despite subsidies (300 billion yuan in 2025) and other measures, saving remains favoured over spending due to a soft labour market and falling property prices.
- Leaders plan to address income issues and continue existing consumption plans, but large cash injections ("helicopter money") are unlikely, despite some economists' calls.
AI generated
SHENZHEN – China has made boosting domestic demand
The emphasis is clear, but analysts say the results will not come quickly, even as the urgency to translate policy intent into stronger consumption persists in Beijing’s long-avowed effort to rebalance growth away from exports.
