‘Consumption boom need to boost China’s economic recovery’
The Chinese government should increase household incomes and improve the country’s social security system in order to boost consumption, a former senior research figure has said.
Zheng Xinli, former deputy director of the Communist Party’s Central Policy Research Office, added that the authorities should not impose restrictions on the purchase of big-ticket items like houses and cars. “The market conditions of products like homes and cars have a greater impact on economic stability,” he said.
Writing for the Study Times, Zheng said: “We need to improve management of production and sales channels, not impose administrative restrictions hastily, and create a favourable policy environment for sustainable growth of the real estate and automobile industries.”
The article was published ahead of the forthcoming meeting of the party’s Central Committee, scheduled for July. It is expected that economic reform will be high on the agenda, to tackle tightening factory output, property purchases and consumer spending.
In May, Beijing announced measures to help stabilise its property market, including an injection of 300 billion yuan (£34 billion) to help clear excess stock. However, the government’s rescue package has yet to make an impact as new home prices saw a further decline in May, the steepest drop in nearly 10 years, the researcher said.
Zheng also called for an expansion of service sectors including education, tourism, culture, law and sports, saying all carry “huge potential” to serve as new drivers for growth.
The China Retail Performance Index, a barometer of retail sector sentiment, stood at a 12-month high of 50.4% in April, reflecting assurances made by central government that it would expand domestic demand and support the wider economy.
All levels of education should be improved to develop “new productive forces”, Zheng said in his Study Times article. To address the current shortage of skilled personnel and high rates of unemployment among college graduates, China should step up vocational education, increase salaries and offer opportunities for upward mobility among skilled workers, he said.
The Chinese government is already looking to create more job opportunities for the country’s graduates in a wide arrange of sectors.
Earlier this month, the Ministry of Human Resources and Social Security said Beijing is expected to create more job opportunities for almost 12 million graduates who are at the start of their careers.
Nineteen new professions, including roles such as e-commerce live-streamers and intelligent connected vehicle testers, are on the horizon, according to a recent plan published by the Ministry. It said these new professions and types of work are an indication of the demand for talent and the shortage of labour.
Zheng further recommended the setting up of ‘super strong’ technology research teams and enterprises with the capacity for innovation, using taxation and finance policy to support investment in hi-tech research and development.
‘Little giants’ rewarded for their innovation
Around 1,000 specialist and innovative small and medium-sized enterprises are to receive government rewards and subsidies in 2024 from a dedicated fund, to support them in facilitating high-quality development, the Ministry of Finance and the Ministry of Industry and Information Technology announced in a joint statement.
The fund will be divided into three, and will be used to mainly support the high-quality development of those national-level enterprises in key areas during the 2024 to 2026 period, with around 1,000 enterprises expected to be covered in 2024. This will be expanded to another tranche of enterprises in 2025 and 2026.
The rewards and subsidies are aimed to encourage the enterprises in key areas to increase investment in innovation. Funds will be dedicated to management diagnosis, talent training and quality inspections for those enterprises.
These innovation-driven small and medium-sized enterprises, which own core technologies in a niche market and show great market potential, are known as ‘little giants’.
