The Chinese government and the Communist Party jointly issued a lengthy list of planned initiatives on Sunday to encourage people to spend more, in yet another move by Beijing to offset potential harm from its escalating economic warfare with Washington.
Their 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, a large number of which are struggling under enormous debts and plummeting revenues from a decline in the sale of state land.
The action comes as China’s leaders are searching for ways to rebalance the economy away from its 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 expansive 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.
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A housing market crash in the past three years has wiped out much of the savings of China’s middle class. Chinese households have responded by curtailing their spending on hotels, restaurants and other services and putting their savings into bank accounts, despite earning very little interest.
Data released by China’s National Bureau of Statistics on Monday confirmed the trend, showing that consumer spending remains weak while manufacturing, which produces goods in large part for export to foreign markets, stayed strong. Retail sales rose 4 percent in January and February compared to the same months last year, in line with what economists expected, while industrial output was up 5.9 percent, stronger than expected.
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