President-elect Donald Trump has threatened to impose a 60% tariff on Chinese-made products, prompting China to take proactive steps to bolster its domestic economy. In response to mounting challenges, including weak consumer demand and a deepening property crisis, China has rolled out a series of economic measures. These initiatives aim to support the domestic market and sustain growth as the nation braces for the announcement of its 2024 economic growth figures next week.
China's top economic planning body reports that recent measures have already shown "visible effects" in the market. The Chinese government has expanded a list of products eligible for trade-in discounts, offering up to 20% off on new goods. This policy has stimulated sales of high-value items like home appliances and cars, with 81 billion yuan (£8.9bn; $11bn) allocated this year for the consumer goods trade-in scheme. However, China-based economist Dan Wang noted the limitations of such measures, stating:
"The measure is far from being enough to boost consumption." – Dan Wang
Harry Murphy Cruise added that while the policy has helped specific sectors, it has not led to a broad increase in consumer spending:
"While it has supported sales of some listed goods, such as cars and appliances, it hasn't driven an overall uptick in spending," – Harry Murphy Cruise
Despite these challenges, Beijing anticipates China's economic growth in 2024 to hover around 5%. As the world's second-largest economy, China's performance holds significant implications for global markets. A key meeting of China's leaders in December emphasized the necessity of "vigorous" efforts to enhance consumer spending, indicating a focused strategy on reviving internal demand.
China's exporters continue to face difficulties due to weak consumer demand and ongoing issues within the property sector. The government remains committed to boosting its flagging economy through various support measures. The consumer goods trade-in scheme represents one facet of these efforts, yet experts suggest that more comprehensive strategies are required to achieve substantial growth.