China's plan on boosting consumer spending can address long-term challenges: expert

China's latest plan to boost consumer spending establishes a systematic approach to cope with long-term challenges and propel economic growth, said an expert from the Research Institute of China Galaxy Securities on Tuesday.

China on Sunday made public a plan on special initiatives to boost consumer spending, as the world's second-largest economy moves to make domestic demand the main engine and anchor of economic growth.

The plan, organized into eight major sections, adopts a holistic approach by simultaneously addressing factors such as income growth, service sector quality enhancement, upgrading big-ticket spending, and improving the environment for consumers.

During a press conference held by the State Council on Monday, officials from six major departments, such as the National Development and Reform Commission and the Ministry of Finance, outlined the key aspects of the plan.

He Wei, Deputy Director of the Research Institute of China Galaxy Securities, said that the measures unveiled at the press conference went beyond his expectations.

"Yesterday's press conference exceeded my expectations. The new action plan to boost consumption includes eight major initiatives and 30 key tasks, providing a systematic approach to address long-term consumption challenges. Notably, it establishes a clear link between stabilizing property and stock markets and consumption growth -- a bold strategy that reflects strong government confidence," said He.

China will launch special initiatives to boost consumer spending this year, including the issuance of ultra-long special treasury bonds of 300 billion yuan (about 42 billion U.S. dollars) to support the consumer goods trade-in program.

The move contributes to creating a robust safety net for short-term spending while enabling deeper structural reforms, He noted.

In addition to traditional consumer sectors, the plan also lays emphasis on emerging categories like artificial intelligence-powered products.

The country will also work to strictly implement the paid annual leave system -- ensuring that workers' rights to rest and vacation are legally protected, according to the plan.

"This year's policy mix combines direct subsidies with comprehensive supporting measures. What stands out is the emphasis on fostering new consumption formats, which will drive the development of new quality productive forces and enhance China's global industrial competitiveness. The integration of AI across industries is rapidly transforming consumption patterns and supply chains, promising significant wealth creation. However, it is crucial to address wealth distribution fairness and employment stability -- key areas for future policy refinement. The inclusion of workers' rest and leave protections in the consumer environment improvements represents progressive policymaking, showcasing the plan's human-centric approach," said the expert.

China's plan on boosting consumer spending can address long-term challenges: expert

The U.S. Consumer Confidence Index fell to 89.1 in December, down from November's revised 92.9, The Conference Board said Tuesday.

The figure is also lower than market expectations of 91.9, showing that U.S. consumers are more pessimistic about current business and labor conditions amid continued economic uncertainty as the year closes.

The Present Situation Index, based on consumers' assessment of current business and labor market conditions, plunged 9.5 points to 116.8 in December. The Expectations Index, based on consumers' short-term outlook for income, business and labor market conditions, held steady at 70.7, remaining below the recession threshold of 80.

Consumers' assessments of current business conditions turned mildly pessimistic in December, with 18.7 percent of consumers saying business conditions were "good," down from 21 percent in November, and 19.1 percent saying business conditions were "bad," up from 15.8 percent.

Consumers' views of the labor market were also weaker in December, as 26.7 percent of consumers said jobs were "plentiful," down from 28.2 percent in November, and 20.8 percent said jobs were "hard to get," up from 20.1 percent.

Looking ahead, consumers' outlook for income prospects was slightly less positive in December, as 18.4 percent of consumers expected their incomes to increase, up from 17.6 percent in November, while 14.7 percent expected their incomes to decrease, up from 12.5 percent. "Consumers' write-in responses on factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics. However, December saw increases in mentions of immigration, war, and topics related to personal finances -- including interest rates, taxes and income, banks, and insurance, according to Dana Peterson, chief economist of The Conference Board.

U.S. consumer confidence index falls to 89.1 in December