From the South China Morning Post, March 17:
The Post breaks down Beijing’s new 30-point action plan, which targets a slew of underlying issues holding back consumption
The top organs of the Chinese government and the ruling Communist Party jointly released a 30-point plan to boost domestic consumption on Sunday.
The strategy, which analysts have described as Beijing’s most comprehensive policy to stimulate consumption since the 1970s, tackles a broad range of issues that will need to be addressed if China is to shift its economy onto a consumption-driven growth model.
Below we offer a closer look at the key measures listed in the plan.
Which measures are designed to boost demand?
On the demand side, the plan focuses on easing spending by raising household income levels and reducing the financial burdens many families are facing. Here are four of the main issues addressed.
1. Lowering childcare costs. The plan lays out targets to establish a childcare subsidy system and increase the supply of paediatric services. Eligible regions will also be encouraged to provide inclusive childcare institutions with support in finding venues and operational subsidies.
2. Improving support for senior citizens. Private capital will be given a greater role in the provision of elderly care and childcare services. The basic pension for both rural and urban residents will be improved, and individual retirement accounts will be promoted as a “third pillar” of the pension system.
3. Stabilising the stock and property markets. The plan includes multiple measures to stabilise the stock market, including a crackdown on fraud in the capital market and illegal reductions of holdings by shareholders of listed companies. It also aims to build up a market stabilisation mechanism and encourage more long-term capital flows into the market.
The directive also sets a goal of preventing further declines in property prices by allowing city governments to buy up commercial property and generate demand by renovating urban villages and dilapidated homes.
4. Ensuring small businesses get paid. Measures will be taken to address the issue of late and defaulting of payments to businesses, which is particularly widespread in the case of smaller private contractors that rendered services to government organs and state-owned enterprises.
Which measures deal with the supply side?
On the supply side, the plan takes a multifaceted approach, including measures to provide more attractive products in a variety of industries, as well as clamp down on shoddy goods and fraudulent activities.
1. Allowing more foreign investment. Foreign investors will be granted greater market access in a range of sectors, including telecommunications, healthcare and education. China will import more high-quality service products related to healthcare, culture and entertainment.
The plan also calls for service industries such as camping, homestays, property services and “internet + healthcare” to be included in the government’s list of “encouraged foreign investment industries”.
2. Boosting auto-related consumption. Pilot reforms will be launched to encourage more services in automotive-related industries, such as car modification, leasing, events and RV camping....
....MUCH MORE
