China’s Ministry of Commerce and 11 other departments issued a document in early January which aims to stimulate consumption in key areas.
These areas focus on vehicles, home appliances and catering. The document encourages cities to reduce restrictions on car purchases for the sake of pollution control and subsidies to encourage people to replace high-emission cars with green ones. The policy encourages people to replace and recycle inefficient home appliances for energy-efficient models.
The document stresses the need to release consumption potential in rural areas. The document demands upgrades to the rural supply chain for agricultural products, improvements to the circulation network and tightened food safety supervision.
Wang Bingnan, deputy commerce minister, told media that the key areas in the document are all pillars of the consumption market and are crucial to expanding and developing the domestic market. This is a major part of what the central government has called the “dual circulation” model which values both domestic and international markets in response to the economic slowdown caused by the Covid-19 pandemic.
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