BEIJING (Reuters) – China plans to take measures to promote household consumption, state media reported on Thursday, citing discussions at a cabinet meeting chaired by Premier Li Qiang, amid concerns about a stuttering post-COVID economic recovery.
The meeting came as growth in the world’s second-largest economy has slowed in recent months after coming back to life with the lifting of three years of restrictive zero-COVID policies.
Markets broadly expect stimulus policies to be unveiled in July when a regular meeting of the Communist Party’s political bureau will be held.
“Taking targeted measures to boost (household consumption) is conducive to driving growth in consumer spending and economic recovery,” the report said, citing the cabinet meeting.
“Household consumption involves many areas and has a long upstream and downstream chain,” it said.
These measures should be coordinated with policies for the renovation of old neighborhoods, the renovation of homes suitable for the elderly, the establishment of convenient neighbourhoods, and the improvement of recycling networks for waste materials, the meeting agreed, according to the report.
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S&P and major banks have downgraded their 2023 GDP forecasts for China. In May, property investment slumped further, industrial output and retail sales growth missed forecasts, spurring calls for further stimulus.
Last week, China cut its key lending benchmarks, the first such reductions in 10 months. Two weeks ago, the People’s Bank of China (PBOC) lowered short- and medium-term policy rates.
(Reporting by Liangping Gao and Kevin Yao; editing by John Stonestreet and Conor Humphries)