China's Strategic Shift: Prioritizing Consumption in Economic Growth

China is implementing more fiscal stimulus to strengthen domestic consumption amid challenges from a U.S. trade war and economic vulnerabilities. Premier Li Qiang emphasizes boosting consumption and technology, marking a shift in economic priorities for 2025. Despite growth plans, household spending remains below global averages.

China has unveiled a new fiscal stimulus strategy aimed at bolstering consumer spending, as a defensive response to the intensifying trade war with the United States. Premier Li Qiang, speaking at China's parliament, highlighted the need to prioritize consumption for achieving the country's targeted economic growth of around 5%.

The trade tensions with the United States, along with fragile domestic demand and a property sector in flux, are putting China's economy at risk. Officials are being urged to focus on consumer-led initiatives, reducing dependency on exports and investments. Li's report underscored this with increased mentions of 'consumption' and 'technology'.

Despite these strategic shifts, China's economic outlook faces challenges. Analysts and economists urge broader fiscal reforms and a stronger welfare system. China's household spending remains significantly low, suggesting a pressing need for policy adjustments to stimulate domestic consumption and achieve sustainable growth.

(With inputs from agencies.)