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China vows to ‘restore and expand’ consumption to boost growth

China’s top economic state planner vowed Tuesday to “restore and expand” consumption in a wide-ranging plan to bolster growth in the world’s second-largest economy

Fred Lee | Getty Images News | Getty Images

China’s top economic state planner vowed Tuesday to “restore and expand” consumption in a wide-ranging plan to bolster growth that includes boosting household income, improving business environment for private firms and stabilizing youth employment.

China’s continued economic recovery is still faced with insufficient demand, weak momentum, and weak confidence, Jin Xiandong, an official with the National Development and Reform Commission, said Tuesday at the agency’s monthly press conference in Beijing, according to a CNBC translation.

“Consumer purchasing power and expectations are relatively weak, while consumption infrastructure and environment need to be improved,” Jin added.

On Monday, a raft of weaker-than-expected economic data provided more basis for market watchers to renew calls for policy support to bolster growth. Chinese leaders have signaled in recent weeks they are likely to be judicious and targeted in their policy support.

China’s GDP for the second quarter grew 6.3% from a year ago, missing market expectations for 7.3%. It marked a 0.8% growth compared to the first quarter, and was slower than the 2.2% quarter-on-quarter pace recorded in the January to March period.

Even with a low base from last year, given the Covid lockdown in Shanghai, retail sales growth slowed to 3.1% in June from a year before, compared to 12.7% in May.

“We will promptly formulate and introduce policies to restore and expand consumption, and issue policies to stabilize large scale consumption, promote the consumption of automobile and electronic products, expand rural consumption, and optimize the consumption environment” Jin added.

“Effective policy measures will be implemented as soon as possible.”

Within hours, Commerce Ministry followed with an announcement of an 11-point plan to boost the domestic consumption of household consumer goods and services.

This included a directive to local governments to step up the renovation of old homes, a pledge to encourage improvements to online commercial platforms, and to develop the concept of “15-minute cities.”

This is a developing story. Please check back for updates.

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