China on Sunday made public a plan on special initiatives to increase #consumption, as the world's second-largest #economy moves to make domestic demand the main engine and anchor of economic growth.https://t.co/5XeZU828D4
— China SCIO (@chinascio) March 17, 2025
Asian shares advanced on Monday, buoyed by strong economic data from China and optimism surrounding potential consumption-boosting measures in the country. European markets also rose, supported by the positive sentiment from Asia and higher oil prices hovering near two-week highs. In contrast, Wall Street futures declined as recession concerns persisted in the United States.
Will be important to watch where resources come from to support domestic consumption. Local governments already are strapped for cash and no longer have option of selling property to developers to raise revenue. https://t.co/hUr37yq2Zt
— Ryan Hass (@ryanl_hass) March 16, 2025
The mood was further dampened by worries over President Donald Trump’s recently implemented tariff hikes, which are expected to slow growth in Canada, Mexico, and the U.S., while also driving up inflation. The Organisation for Economic Co-operation and Development (OECD) cut its global economic outlook earlier in the day, warning that an extended trade war could further hinder global growth. Speaking to reporters on Air Force One, Trump said he has no intention to back away from another round of tariffs due to take effect on April 2.
“April 2 is a liberating day for our country,” Trump said.
1/5
Yicai: "China will promote reasonable salary growth by strengthening employment support in response to economic conditions and improving minimum wage adjustment mechanisms."https://t.co/65I1xTWIcZ— Michael Pettis (@michaelxpettis) March 17, 2025
China’s consumption-boosting strategy
“We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”
China, meanwhile, is launching a special action plan aimed at boosting domestic consumption in response to the recent squeeze in consumer demand.
The government aims to increase household incomes and introduce a childcare subsidy scheme to support families. In a statement, officials underscored the importance of fostering economic stability and growth through enhanced domestic consumption. The plan is also a strategic move to balance economic reliance away from exports and towards a more self-sustaining model driven by domestic consumer expenditure.
China’s industrial output rose nearly 6% in the first two months of the year from a year earlier, and retail sales were up 4%, the government reported Monday. However, officials reported continued weakness in the property market, with home prices falling and real estate investment down nearly 10% from a year earlier. On Friday, Wall Street’s roller coaster shot back upward, but not enough to keep the U.S. market from a fourth straight losing week, its longest such streak this year.
The uncertainties created by Trump’s barrage of tariff announcements and other policies have already impacted U.S. households and businesses, raising fears about a pullback in spending that could sap energy from the economy.
