FILE PHOTO: An advertisement for LVMH Moet Hennessy Louis Vuitton SE in the Nanjing Road shopping district in Shanghai, China, on Wednesday, May 1, 2024. Economists warned that the growth rate -- among the lowest in decades -- masked longstanding weak consumer sentiment in China that has shown no sign of reversing.- Bloomberg
BEIJING: China pledged "forceful" measures on Tuesday (Jan 20) to boost demand in coming years, formulating plans to relieve a domestic spending slump exacerbated by property sector woes and demographic pressure.
The world's second-largest economy grew five per cent last year, according to official data released Monday, buoyed by record-breaking exports and reaching the government's official target.
But economists warned that the growth rate -- among the lowest in decades -- masked longstanding weak consumer sentiment in China that has shown no sign of reversing.
Beijing's newest "five-year plan" for 2026-2030, expected to be approved in March, will implement policies to address this key issue, officials said at a news conference Tuesday.
"The current economy faces the problem of strong supply but weak demand," said Wang Changlin, Vice Chairman of the National Development and Reform Commission (NDRC), the country's top body for economic planning.
Wang said that the NDRC will "study and formulate an implementation plan for expanding domestic demand from 2026 to 2030", vowing to "create new demand through new supply and provide strong innovative measures".
A protracted debt crisis in China's vast real-estate sector has discouraged would-be homebuyers from investing in property -- long a key store of wealth.
Complicating the challenges are demographic trends, with a shrinking and ageing population weakening the outlook for a future spending boom.
Recent figures have highlighted the hurdles facing policymakers in their bid to spur spending.
Retail sales grew just 0.9 per cent year-on-year in December, official data showed Monday.
That marked the weakest pace since the end of 2022, when the country's stringent zero-Covid measures were scrapped. - AFP
