China says to craft policies to boost consumer spending, improve child care

© Reuters. A woman and a child walk past workers sorting toys at a shopping mall in Beijing, China January 11, 2023. REUTERS/Tingshu Wang/File Photo

By Joe Cash

BEIJING (Reuters) -Chinese authorities said on Thursday they will craft policies aimed at stimulating spending on housing and unlocking consumer savings that have built up during the pandemic.

The policies include efforts to help the elderly, improve child care services and encourage couples to have more children – announcements that follow a historic decline in China’s population last year.

The plans from China’s state planning body, the finance and industry ministries were outlined in Qiushi, the ruling Communist Party’s journal. The central bank also said this week that it would encourage financial institutions to lend more to private sector businesses.

While not all new in content, the slew of announcements underscores a sense of urgency on the part of Chinese authorities in their efforts to reinvigorate the economy. Last year it slumped to one of its weakest levels of growth in nearly half a century, battered by zero-COVID policies.

Analysts expect stimulus measures to be announced over the coming months, noting that data has shown some signs of recovery in the economy although it is still far from firing on all cylinders.

“The foundation for economic recovery is not yet solid and there is great uncertainty for fiscal revenue,” Liu Kun, China’s finance minister wrote in Qiushi, adding that while fiscal revenue would grow this year, the growth rate will not be too high.

The National Development and Reform Commission, China’s state planner, said it will work on plans to boost incomes, improve the spending power of low and middle-income citizens as well as encourage spending on housing, new energy vehicles and elderly care services.

The finance ministry said policymakers will seek to encourage and attract more private capital to the market, while also taking steps to curb the increase in hidden debts and prevent illegal and irregular debt raising.

China will accelerate the research and development of key technologies, Jin Zhuanglong, the industry and information technology minister, also wrote in Qiushi.