(Bloomberg) -- China has announced a 20-step action plan to get people to spend more, but offered little in the way of financial incentives to rev up domestic demand.
It’s the latest attempt by Beijing to find a formula for making households less averse to shopping. Behind the urgency is China’s increasingly lopsided post-pandemic recovery, as weak consumer spending offsets a boom in exports at a time when trade tensions are also on the rise. Economic growth has slowed to the worst pace in five quarters, with retail sales rising in June at the slowest monthly clip since December 2022.
But China’s ruling Communist Party has long been reluctant to extend aid in the form of direct household support, including cash handouts, an approach continued in its action plan released on Saturday. In a bid to boost consumption — essentially to get people to open their wallets and spend their cash — the State Council outlined 20 key steps the country needs to take, from improving restaurants and tourist facilities to building more sporting venues and growing e-sports. Here are the main proposals:
- Food and sleep: Improve the quality of restaurants and cultivate famous dishes, chefs and restaurants to get people eating out more. Encourage internationally renowned catering brands to open flagship stores. Cultivate mid- to high-end hotel and homestay brands, and develop rural accommodation.
- Domestic services: Support the development of employee-based domestic service enterprises and increase their supply.
- Elderly care and childcare: Improve access to public spaces and homes, and improve elderly and medical care services. Renovate old elderly and childcare institutions, while constructing additional facilities.
- Culture and entertainment: Improve and increase cultural and creative projects across regions. Improve the distribution of films and improve the quality of online offerings, from games to radio and television. Accelerate development of ultra-high-definition television and encourage the development of new media formats.
- Tourism: Boost cultural and nighttime tourism and encourage the development of experiences, such as RV camping, yacht cruises and low-altitude flights. Capitalize on “silver-haired tourism,” with trains and routes targeting the elderly. Improve transport services, speed up the resumption of flight schedules and provide visitors with diversified payment options.
- Sports: Revamp vacant venues and renovate spaces like abandoned factories and warehouses to increase the number of sporting venues. Develop and promote ice and snow sports across the country. Attempt to attract top international sporting events.
- Education and training: Promote high-quality educational resources to the general public and build more vocational schools. Promote social training institutions to improve service quality, and allow schools to work with third party institutions to provide after-school services.
- Residential: Encourage property services enterprises to partner with elderly care, childcare, catering and other enterprises, to develop a “property service+life service” model. Encourage support for residents to carry out decoration and renovations.
- Digital: Use technology to develop smart business districts, smart blocks and smart stores; accelerate new methods of consumption such as unmanned retail stores and self-collection cabinets. Support the rise of e-sports and live broadcast e-commerce.
- Green: Establish and improve green and low-carbon service standards, certification, and labeling systems. Promote the application of advanced green and low-carbon technologies.
- Health: Promote services such as health examinations and consultations; improve insurance products; support Chinese medicine enterprises and increase the function of retail pharmacies to include areas such as nutrition and health promotion.
- Service consumption innovation: Promote the transformation and upgrading of pedestrian streets, accelerate the construction of 15-minute “convenient living circles” in cities; improve the urban and rural service consumption network.
- Service industry brands: Support service industry enterprises to strengthen brand cultivation, operation and protection, while supporting the role of traditional Chinese brands.
- Service industry expansion: Expand the opening up of the service industry and relax market access in fields including telecommunications, education, elderly care, medical care and health. Attract international investment through the use of trade fairs.
- Service industry supervision: Strengthen supervision of the industry, cracking down on false advertising, online fraud, information and leakage. Encourage communities to strengthen consumer rights protection.
- Service industry compliance: Strengthen the collection and disclosure of credit information such as registration and filing, administrative licenses, and administrative penalties of relevant business entities.
- Service industry standards: Improve standards in the fields of culture, tourism, catering and accommodation, domestic services, elderly care and childcare, home furnishing and decoration, business services, etc.
- Strengthen fiscal taxation and support: Encourage institutions to to provide financing and credit for small and medium businesses and increase credit support for service consumption industries. Implement personal income tax deduction policies for things like caring for infants, children’s education and support for the elderly.
- Talent: Continue to establish and improve training programs for the service industry, and develop new occupations and standards within the industry.
- Statistics: Improve statistical monitoring of the service consumption market, with strengthened collection, analysis and forecasting of service consumption data.
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