China aims to boost consumption and imports as global demand cools

China’s cabinet said on Saturday it would promote a consumption recovery as the major driver of the economy and boost imports, state broadcaster CCTV reported, at a time of cooling global demand as major economies teeter on the brink of recession.

At a meeting chaired by Premier Li Keqiang, China’s state council – which functions as the cabinet – also vowed to speed up the rollout of foreign investment projects, maintain a stable yuan, ease cross-border travel and help companies to participate in domestic and overseas trade shows.

The cabinet also reaffirmed its support for the private sector and digital platform economy, which have taken a knock from a series of regulatory crackdowns in recent years.

It also discussed measures to support farmers to start spring planting, including subsidies for soybean sowing, CCTV reported.

During the week-long Lunar New Year holiday that ended on Friday, consumption increased 12.2% from the same period last year, the tax authority said on Saturday, reflecting a rebound after the relaxing of some of the world’s tightest COVID-19curbs.

Analysts at Japanese brokerage Nomura said in a research note on Saturday that consumption of in-person services had recovered notably, as seen in the rebound of trips made and tourism earnings.

But they said households were likely to be moderate in releasing pent-up demand.

Chinese exports shrank sharply in December as global demand cooled, but a more modest decline in imports led economic analysts to forecast a slow recovery in domestic demand in the coming months.

China’s economy grew by 3.0% in 2022 when stringent COVID measures were still in place, well below the official target for “around” 5.5%, official data showed earlier this month.

Growth is expected to rebound to 4.9% in 2023, before steadying in 2024, according to a Reuters poll of economists.