Boosting Consumption in China
Counter-cyclical measures should be a top priority in the consumption policy toolkit.
To effectively boost consumption, measures should be prioritized based on certain principles. This involves dividing consumption into four components: total income, primary distribution, secondary distribution, and propensity to consume, and analyzing the factors that influence each part.
In March, the State Council issued a special action plan for boosting consumption, which includes 30 key tasks covering various aspects related to consumption. Given the sheer number of tasks, it is essential to prioritize them based on importance and urgency.
To understand the driving forces behind China's consumption, it is crucial to examine the determining factors observed in the past and evaluate their potential to drive future growth. Additionally, identifying which forces are driven by market self-regulation and which require government intervention is important.
Counter-cyclical measures should top consumption policy toolkit
Author's summary: China's consumption policy should prioritize counter-cyclical measures.