China Boosts Spending Amid Trump Tariffs

China has launched a “special action plan” to boost domestic consumption as U.S. tariffs imposed by President Donald Trump weigh on its economy. The plan, revealed by the Xinhua news agency, includes measures to increase incomes, introduce childcare subsidies, and expand a “cash-for-clunkers” program for items like cars and electronics.

Premier Li Qiang emphasized the importance of maintaining economic stability, aiming for a 5% growth target for the year. However, consumer confidence remains low due to employment uncertainties and a prolonged property market slump.

China faces challenges globally, as the U.S. raised tariffs on Chinese imports to 20%, leading China to retaliate with new tariffs on U.S. agricultural goods. Domestically, retail sales rose by 4% in January and February, but deflation continues to undermine spending incentives. Industrial production grew by 5.9%, supported by fiscal stimulus, but economists predict recovery will be limited due to ongoing economic headwinds.

This economic strategy reflects China’s efforts to shift away from export dependency and focus on bolstering internal demand. However, with consumer prices falling by 0.7% in February and broader economic pressures persisting, sustaining growth will require more decisive measures. The trade war with the U.S. adds further complications, but China's leadership remains committed to addressing domestic challenges while navigating the global economic landscape.