Friday, June 2, 2023

The Chinese Executive calls for efforts to recover consumption

The State Council (Executive) of China called for “efforts to accelerate the recovery of consumption” and to “stabilize economic growth,” state media reported in recent hours.

During a meeting chaired by Prime Minister Li Keqiang, the Executive pointed out that consumption is the “main engine of the economy” and urged “implementing policies aimed at promoting it.”

Likewise, the State Council demanded measures to “accelerate the recovery of contact-based consumption”, in reference to the activities that suffered the most restrictions during the validity of the ‘zero covid’ policy, dismantled as of December by the authorities .

During the holiday week for the Lunar New Year, which ended this Friday, there were 308 million trips, a figure 23.1% higher than the same period in 2022, when mobility limits were in force as part of the policy of ‘zero covid’.

Despite the relative recovery of the tourism sector, one of the most affected by the ‘zero covid’ strategy, with respect to the 2022 festive period, the number of trips and the amount of income generated by the travel industry remain below those registered in the Lunar New Year of 2019, the last one before the outbreak of the pandemic.

In addition, the Executive promised “support measures to stabilize international trade” and to “encourage Chinese companies to participate in both national and international trade fairs”, after almost three years in which the almost total closure of borders affected the contacts between companies inside and outside China.

The official figures reflected a growth of the Chinese gross domestic product (GDP) in 2022 of 3%, far from the government target of 5.5% and one of the lowest figures in decades.

The consultancy Capital Economics recently predicted that China will grow 5.5% in 2023, thanks to a rebound caused by the disappearance of disruptions to economic activity and the trend towards growth-friendly policies.


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