China shifts focus to boost consumer spending with major stimulus plan

Beijing: In a departure from its long-standing economic strategy, China is shifting focus toward stimulating consumer spending to help meet its 2024 growth targets. Beijing is preparing to issue sovereign bonds worth approximately 2 trillion yuan ($284 billion) this year, with part of the funds allocated to subsidise consumer goods purchases and child support, Reuters reported. This marks a significant policy change aimed at boosting household demand, which many economists have advocated for over the past decade.

The new stimulus approach represents a move away from the traditional reliance on infrastructure and investment-driven growth. Economists have long warned that without increased consumer spending, China risks sliding into prolonged low growth, similar to Japan’s experience in the 1990s.

While this shift is seen as a positive step, transforming household demand into a sustainable driver of growth is expected to be a complex and lengthy process, requiring difficult policy choices along the way. The move reflects Beijing’s recognition that to sustain long-term growth, domestic consumption must play a larger role in the economy.