China Ups the Ante: Fiscal Stimulus to Boost Consumption Amid U.S. Trade Tensions

China unveils new fiscal stimulus measures to bolster consumption and counteract challenges from the U.S. trade war. Premier Li Qiang emphasizes reducing reliance on exports and pursuing balanced macroeconomic policies. The focus on increasing consumer spending marks a shift from technology-driven priorities to address economic vulnerabilities.

China has announced additional fiscal stimulus measures aimed at boosting consumption, as trade tensions with the United States continue to escalate. Premier Li Qiang highlighted the need to focus on consumer spending to achieve this year's growth target of approximately 5%.

Li acknowledged the ongoing complexities in global trade, warning that these challenges could have significant impacts on China's economy, particularly in sectors like technology and science. The trade war, combined with sluggish domestic demand, puts pressure on China's traditionally export-driven growth model.

To mitigate these pressures, China plans to elevate consumer-driven growth policies. The government aims for a budget deficit increase and significant issuance of special treasury bonds to support consumption subsidies and welfare system enhancements, redirecting focus from solely industrial and technological advancement.

(With inputs from agencies.)