China aims to boost consumption and imports as global demand cools

BEIJING, Jan 28 (Reuters) – China’s cabinet said on
Saturday it would promote a consumption recovery as the major
driver of the economy and boost imports, state broadcaster CCTV
reported, at a time of cooling global demand as major economies
teeter on the brink of recession.

At a meeting chaired by Premier Li Keqiang, China’s state
council – which functions as the cabinet – also vowed to speed
up the rollout of foreign investment projects, maintain a stable
yuan, ease cross-border travel and help companies to participate
in domestic and overseas trade shows.

The cabinet also reaffirmed its support for the private
sector and digital platform economy, which have taken a knock
from a series of regulatory crackdowns in recent years.

It also discussed measures to support farmers to start
spring planting, including subsidies for soybean sowing, CCTV
reported.

During the week-long Lunar New Year holiday that ended on
Friday, consumption increased 12.2% from the same period last
year, the tax authority said on Saturday, reflecting a rebound
after the relaxing of some of the world’s tightest COVID-19
curbs.

Analysts at Japanese brokerage Nomura said in a research
note on Saturday that consumption of in-person services had
recovered notably, as seen in the rebound of trips made and
tourism earnings.

But they said households were likely to be moderate in
releasing pent-up demand.

Chinese exports shrank sharply in December as global demand
cooled, but a more modest decline in imports led economic
analysts to forecast a slow recovery in domestic demand in the
coming months.

China’s economy grew by 3.0% in 2022, when stringent COVID
measures were still in place, well below the official target for
“around” 5.5%, official data showed earlier this month.

Growth is expected to rebound to 4.9% in 2023, before
steadying in 2024, according to a Reuters poll of economists.
(Reporting by Yew Lun Tian
Additional reporting by Shanghai newsroom
Editing by Helen Popper)