China plans to promote consumption despite Trump-Zöllen

China plans to promote consumption despite Trump-Zöllen

in Hong Kong, China has introduced a far-reaching "special action plan" to boost the internal editions and thus to counteract the economic effects of the tariffs imposed by US President Donald Trump.

Details of the special action plan

The initiative that on Sunday by the State news agency Xinhua announced was ambitious, but does not go into the depths of specific measures. As part of the plan, the income of people should increase, implement a child benefit system and to expand a "old-against-new" program to submit old devices such as cars and electronics.

economic growth goals and challenges

The plan builds on the promise of Premier Li Qiang that the "gigantic ship of the Chinese economy" will "stable into the future". Li had set an ambitious growth goal of "around 5%" for this year. This goal can only be reached if the expenses are increased to prevent China from continuing to be dependent on exports in order to stimulate its huge but slowly growing economy.

weaknesses of the Chinese economy

The Chinese economy is still burdened by weak consumer expenditure, an uncertain employment situation and a long -lasting decline in the real estate sector. Internationally, China is also exposed to increasing pressure because the United States exacerbated the trade war against the country.

response to trade tariffs

Trump has doubled the tariffs to all Chinese imports to 20%, which came into force this month. In response to this, China announced a new round of retaliatory tariffs that affect US agricultural imports and came into force last week.

Current economic figures

On Monday, the National Statistics Office (NBS) reported that retail sales, an important indicator of consumption, rose by 4.0% in the period from January to February. This increase was somewhat faster than the 3.7% growth in December and met the expectations of a group of economists surveyed by Reuters.

"The Chinese economy started the year well, probably driven by fiscal incentives," said Zichun Huang, an economist at Capital Economics, in a research note. "We expect recovery to last in the coming months, but in view of the broader challenges that the Chinese economy faces, we do not expect that short -term improvements can last in the long term."

The problem of deflation

The country also sees itself a persistent problem of the deflation do it because you expect further falling prices. This puts a strain on consumption, a crucial element for economic growth.

inflation and industrial production

The NBS announced last week that the consumer price index (VPI), which serves to measure inflation, dropped by 0.7% in February compared to the previous year. This was the lowest state of the index for more than a year.

As for industrial production, the NBS reported on Monday that it grew by 5.9% in the first two months of the year, which was easy to increase from 5.3%. The NBS jointly publishes the data for the months of January and February in order to take into account the influence of the New Year's festival, which can either fall into one or the other month.