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China's spending revival plan? Buy new appliances, cars and travel a lot
China's Premier Li Qiang pledged in China’s annual work report to promote “consumer goods trade-in programs”.
China’s latest bid to fuel weak consumer sentiment? Urging citizens to trade in their appliances and cars for new models, and promising they’ll get more paid vacation days where they can shop and spend.
Repeating a call made by President Xi Jinping last month, Premier Li Qiang pledged in China’s annual work report to promote “consumer goods trade-in programs” to boost spending on electric vehicles, electronic products and other big-ticket items.
The report released Tuesday as the National People’s Congress kicked off in Beijing also promised to strengthen protection of consumer rights and interests and “implement paid leave.”
Chinese labor law only grants employees up to 15 days of paid leave, and businesses can be stingier in implementation, leaving most workers with little time off.
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There have long been calls for reform to the system. State outlet China Youth Daily said Hong Kong lawmaker Fok Kai-Kong planned to submit a proposal about optimizing paid leave rules to add one day annually from the third year of employment — granting more days off for the younger Gen Z workers seen as a major force of consumption.
Nevertheless, time off to travel may not be the problem. China has already seen domestic leisure travel bounce back to pre-pandemic levels, but per capita spending remains lower than before Covid.
Economic data, including retail sales, have posted disappointing growth in recent months. Pressures like an ongoing property crisis and deepening deflation fears have led the mainland’s once-flush middle class to pull back on shopping, and sent tremors through major global brands counting on their business. China set an ambitious 2024 growth target of around 5% at the NPC, raising expectations for its leaders to unleash more stimulus.
