China’s “Special Action Plan to Boost Consumption” seeks to revitalize the economy by raising salaries and expanding social benefits.

Beijing, March 2025 While deflation rises and the housing sector and global trade suffer, China declares a robust economic recovery plan that is set to vigorously “stimulate consumption.” The plan shared on Sunday by the CPC Central Committee and State Council details the measures officials are ready to take. Insiders call this the toughest challenge for the world’s second-largest economy.

Beijing’s authorities are asking local governments that are struggling financially to increase their spending to support businesses, consumers, and workers.

China, the second-largest economy in the world, released a “Special Action Plan to Boost Consumption” on Sunday in an attempt to encourage domestic spending.

Further steps were also described in the extensive statement, such as the introduction of new bond instruments that are suitable for private investors and the implementation of “multiple measures” to stabilize the stock market.

With the most recent CPI in February dropping the most precipitously in almost a year and the PPI in negative growth territory since September 2022, China is now facing a dreary consumer climate.

On Sunday, Beijing made another move to ease the impact of its economic conflict with Washington. The communist party and the Chinese government released a long list of initiatives. These plans aim to encourage citizens to spend more.

Higher incomes, better medical benefits, and larger pensions were all part of the economic stimulus roadmap and might boost China’s lagging domestic consumption. Nevertheless, it gave a lot of these duties to the local governments of the nation, many of whom are struggling with enormous debts and dwindling profits from the scale of public property.

To boost domestic consumption, China’s State Council announced a “special action plan” on Sunday that includes initiatives like increasing local salaries and creating a childcare subsidy program.

The move comes as China’s consumer demand has been subject to many setbacks in recent years, including a protracted property slowdown and interruptions from COVID-19, which have decreased people’s desire to spend and fueled deflationary tendencies.

To “energetically enhance spending, broaden internal demand comprehensively, and elevate consumption ability by raising earnings and lightening burdens,” the council’s report dispatched the strategy to all ministries and areas for execution.

Chinese Premier Li Qiang’s work report to the National People’s Congress, which focused on raising family spending to counteract the consequences of poor international demand, was released a week before the initiative.

To counteract deflationary pressures and reduce the reliance of the second-largest economy in the world on investment and exports for growth, Chinese officials have been under increasing pressure to enact stimulus policies aimed at consumers.

The plan, which was published on Sunday, called for policies including housing adaptations to support farmers and higher earnings in both urban and rural areas.

Despite having a wide reach, the action plan did not provide concrete resources to help local governments create implementation strategies.

Additionally, the strategy called for steps to stabilize the stock market, but it provided no details on how or when this would be accomplished.

The government should “study and establish a childcare subsidy system,” provide flexible work schedules, and let general hospitals host pediatric outpatient appointments at night. Childcare centers operated by employers and the community should also be encouraged.

A portion of Sunday’s message seemed to be written to reassure the Chinese that their assets were safe and that they could start spending again. The government promised to use several ways to stabilize the stock market. It will also help the real estate sector, which is struggling due to falling asset values.

China’s New Steps Toward Increasing Consumption

• The State Council adopted the “Special Measures to Promote Consumption in China” to combat deflation and a drop in consumer expenditure in China’s Chinese economy.
• Changes include increasing wage payments, extending childcare grants, and raising pension benefit payments.
• With local governments already in dire financial straits, these measures are difficult to meet.
• Others include loosening visa restrictions and promotional campaigns for tourism in winter regions.
• Stock market stabilization and the issuance of new bonds designated for private investors are meant to manage the trust deficit problem.
• Barriers to trade due to the Trump administration and blockade by the EU are causing a delay in China’s spending.
• To manage the impact of the global slowdown, Premier Li Qiang pointed out the need for spending by households.
• The capitalization of the stock market due to AI stagnation in U.S. markets led to a 20% share growth in the Hong Kong stock exchange during 2025.

The General Office of the central committee states that the goal is to “enhance consumption capacity by increasing income and reducing burdens,” increase domestic demand, and vigorously promote consumption, according to a Google translation of the report.

Increasing consumption was named the top objective for the next year in China’s annual report on government operations, which was released a week ago by Premier Li Qiang.

Assistance in encouraging both local and international travel was also requested in the plan released on Sunday. Support will be given to ice and snow regions as they work to establish themselves as well-known winter travel destinations worldwide. The number of unilateral visa-free agreements will rise, and regional entry laws will be simplified.

Shen Danyang is the director of the State Council Research Office. He is also the chairman of the government work report writing group. On March 17, he spoke to reporters in Mandarin. He said China needs to focus on domestic demand. This is important because of possible “new shocks” to demand from other countries, according to MWN.

Chinese authorities pledged an additional 30 billion Yuan (41.45 billion) in ultra-long special treasury bonds in January at an annual parliamentary meeting to maintain consumer subsidies.

The stock markets in China have been encouraging lately. Tariffs and the uncertainty created by Mr. Trump’s plans caused the S&P 500 to drop more than 10% from its peak last week in the United States. But in part because of the enthusiasm around the nation’s ambitions to launch its artificial intelligence projects, China’s marketplaces are flourishing.

Since Mr. Trump took office, Hong Kong’s stock market, where a lot of Chinese companies trade, has increased by almost 20%.

Both the general office and the central committee of the communist party and the general office of the cabinet, China’s two highest government organs, signed off on the “Special Action Plan to Boost Consumption” document. The unprecedented action showed that Beijing’s leaders are making a genuine effort to address poor domestic spending. In the wake of deflation and sluggish domestic consumption, the Chinese State Council introduced the “Special Action Plan to Boost Consumption” as the new strategy.