China plans to boost consumer spending to stimulate a flagging economy

China is taking steps to bolster consumption in a key move to stimulate a flagging economy this year.

With rising spending power among its population of 1.4 billion and growing urbanisation, there is untapped potential in a huge consumer market, said the country's state planner yesterday, on the sidelines of its annual parliamentary session.

Consumption has been the main driver of China's economic expansion for six consecutive years, accounting for 76 per cent of its gross domestic product (GDP) growth last year.

Total retail sales grew by 9 per cent last year, although at a slightly slower rate than 2017.

With GDP expansion expected to slide below 6.5 per cent this year, the government is moving to shore up the economy by encouraging greater consumption, especially in new energy vehicles, household appliances and tourism, said National Development and Reform Commission vice-chairman Ning Jizhe.

It will also make e-commerce more accessible to rural-dwellers.

Premier Li Keqiang, in his Budget speech on Tuesday, said the government will boost personal incomes by cutting taxes and creating more jobs as China focuses on an "employment-first policy".

Mr Ning yesterday also said China will increase the number of beds at elderly-care facilities in the next three to five years and improve childcare services, as these have been under-catered.

Also in the pipeline are efforts to strengthen consumer rights protection while cracking down on fake or shoddy products with heftier penalties.

A version of this article appeared in the print edition of The Straits Times on March 07, 2019, with the headline 'Plans to boost consumer spending'. Print Edition | Subscribe