China launches steps to expand consumption in automobile, real estate sectors

China's State Council on Monday (July 31) issued measures to restore and expand consumption in the automobile, real estate, and services sectors. The measures are being issued to give full play to the fundamental role of consumption in economic development.

In a document, the State Council said that in order to promote purchase of new energy vehicles, the government would improve the infrastructure for charging.

It will support housing demand by expanding the supply of affordable rental housing.

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It will also encourage tourism by asking local governments to cut admission fees at scenic areas or even make them free during low periods.

Speaking to state broadcaster CCTV, officials from the National Development and Reform Commission said it will take the summer, mid-autumn, and National Day holidays as an opportunity to expand holiday consumption.

Govt to focus on boosting domestic demand

The development comes a week after top Chinese leaders pledged to step up policy support for the economy focusing on boosting domestic demand. The Chinese economy, the second-largest in the world, grew at a frail pace in the second quarter as demand weakened at home and abroad.

According to a report by the Xinhua news agency on July 24, the country's Politburo (a top decision-making body of the ruling party) said the government would step up economic policy adjustments, focusing on expanding domestic demand, boosting confidence, and preventing risks.

"Currently, China's economy is facing new difficulties and challenges, which mainly arise from insufficient domestic demand, difficulties in the operation of some enterprises, risks and hidden dangers in key areas, as well as a grim and complex external environment," the Politburo was quoted as saying, after a meeting chaired by President Xi Jinping.

The top decision-making body added that the government would implement its macro adjustments "in a precise and forceful manner" and strengthen counter-cyclical adjustments as it sticks with a prudent monetary policy and proactive fiscal policy.

Though China is being seen on track to hit its modest 2023 growth target of around 5%, there were risks of annual goals being missed for the second year in a row, analysts said.

Analysts pointed out that policymakers are unlikely to deliver any aggressive stimulus due to worries about growing debt risks.

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