Opinion: To Restore Confidence in China’s Economy, Help Consumers Spend

Tax cuts and consumption vouchers will provide more income for households and demonstrate the government’s commitment to boosting the wealth of its people

A building under construction in Luohu district, Shenzhen on July 28. Photo: VCG

There have been some changes to China’s economic policy direction, the most evident of which is a pivot toward prioritizing economic growth.

In the past decade, the government gradually downplayed the importance of GDP growth as a primary policy goal, shifting more of its focus toward other aspects such as common prosperity, deleveraging the real estate sector, financial supervision and geopolitical competition.

But this year’s economic recovery has been a disappointment, especially in terms of household spending, due primarily to headwinds including fallout from the Covid-19 pandemic and various tough regulations, which have continued to drag on residents’ confidence. It could be argued that the economy is suffering from post-traumatic stress disorder (PTSD) after multiple shocks in recent years.