China Unleashes Stimulus Blitz in Push to Hit Annual Growth Goal

In a bid to revive its slowing economy and meet the annual growth target, China has announced a significant stimulus package, focusing on both infrastructure spending and boosting consumer demand. This strategic move aims to combat deflationary pressures and promote economic recovery.

The stimulus package, totaling approximately 300 billion yuan (around 42 billion U.S. dollars), is primarily allocated to two key areas: large-scale equipment upgrades and trade-ins of bulk durable consumer goods. Half of the fund is earmarked to support consumer goods trade-ins, which is expected to provide a vital boost to consumer sentiment and domestic demand.

This renewed commitment to expanding consumer spending comes as China's consumer price growth remained moderate at 0.2 percent in June, indicating still-weak domestic demand. To address income inequality and raise residential income, the stimulus package emphasizes economic policies that improve people's livelihoods and expand channels to increase residential income.

The ultra-long special treasury bonds will be allocated to support both consumer goods trade-ins and equipment upgrades, with a focus on enhancing income and increasing consumption to spur domestic demand. The expansion of consumer loans and promotional discounts by merchants is expected to play a crucial role in the effectiveness of the stimulus package.

The long-term effects of the stimulus package on China's economic trajectory are expected to be positive, as it addresses deflationary pressures and promotes economic recovery. By targeting both infrastructure spending and consumer demand, the package aims to balance growth and sustainability, setting the stage for a more resilient economy in the years to come.