China to Boost Fiscal Support for Consumption in 2023
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China will significantly increase fiscal support for consumption next year, aiming to stimulate domestic demand and drive economic growth, according to a statement released by the finance ministry on Tuesday, as reported by Reuters.
The ministry, following a two-day national fiscal work conference, outlined a series of measures designed to "vigorously" boost consumption. These include substantial increases in retirement pensions for both urban and rural residents, as well as enhanced financial subsidies for medical insurance in both sectors.
The government will also intensify support for consumer goods trade-ins, aiming to stimulate demand for durable goods. Additionally, the government plans to increase effective investment and promote social investment through targeted government spending.
"The measures will improve people's livelihoods and the policy system to support population growth as well as strengthen the social security network and health care system," the ministry stated.
The move to increase fiscal support comes as China grapples with a slowing economy and mounting uncertainty surrounding US-China trade relations following the re-election of Donald Trump.
Earlier this month, Chinese leaders pledged to increase the budget deficit, issue more debt, and loosen monetary policy in a bid to stabilize economic growth. Reuters reports that authorities have approved the issuance of 3 trillion yuan ($411 billion) in special treasury bonds for next year, representing a record high and signaling a significant expansion of fiscal stimulus.
Reports last week indicated that Chinese leaders have also agreed to raise the budget deficit to 4% of GDP in 2023, another record, while aiming for an economic growth target of around 5%.
The Chinese government's focus on boosting consumption through increased fiscal spending and social support measures underscores its commitment to stabilizing the economy in the face of both domestic challenges and external uncertainties.