China is shifting focus to boost its economy from within. The People’s Bank of China (PBOC) announced Thursday it will take new steps to support consumption and stabilize foreign trade. This move comes as the world’s second-largest economy faces ongoing challenges.
The central bank plans to improve financial services for the retail sector. They want banks to offer more loans to help businesses in consumer industries. This push aims to get Chinese citizens spending more at home.
“Consumption remains the primary engine for economic growth,” said Liu Guoqiang, deputy governor of the PBOC, during a press briefing in Beijing. “We must strengthen financial support for key consumption areas while making existing consumer credit more accessible.”
The announcement follows disappointing economic data in recent months. China’s domestic demand has remained weak despite earlier government efforts. Retail sales rose just 3.1% in March compared to last year, below the 4.6% analysts expected.
Financial institutions will receive guidance to develop new products specifically designed for consumer spending. The central bank also wants to make it easier for small retailers to get loans. These businesses often struggle to secure financing despite their importance to local economies.
Foreign trade also features prominently in the PBOC’s plans. The bank will enhance financial support for export businesses facing global economic uncertainties. This includes expanding trade credit and offering more favorable exchange rate tools.
“We must provide targeted assistance to foreign trade enterprises, especially those with orders but lacking sufficient capital,” Liu explained. The central bank will coordinate with commercial banks to ensure exporters can access needed funds quickly.
Economic experts see this as part of China’s larger strategy to balance growth sources. “China is trying to navigate multiple challenges simultaneously,” said Zhang Wei, chief economist at China Construction Bank. “They need to stimulate domestic demand while protecting export industries from global headwinds.”
The new measures come amid growing tensions with trading partners. The European Union recently imposed preliminary tariffs on Chinese electric vehicles, while the United States maintains various trade restrictions.
The central bank’s announcement didn’t include specific targets or deadlines. However, officials stressed these measures would begin implementation immediately. The PBOC also promised to work closely with other government departments to ensure policy coordination.
Consumer confidence has remained a persistent problem in China’s post-pandemic recovery. Many households continue saving rather than spending, concerned about economic uncertainties and property market instability.
Recent data from the National Bureau of Statistics showed household savings reached a record 133.5 trillion yuan ($18.9 trillion) by the end of March. This represents an increase of 10.3% from the previous year.
“The key challenge is converting these savings into active consumption,” noted Li Xin, director of retail banking at Bank of China. “People need confidence in their future income and economic stability before they’ll open their wallets.”
The central bank’s initiatives align with broader government efforts to reduce reliance on property investment and increase domestic consumption’s role in economic growth. Last month, China’s State Council released guidelines encouraging financial institutions to support consumer sectors.
Financial markets responded cautiously to the announcement. The Shanghai Composite Index rose 0.3% Thursday, while the yuan held steady against the dollar.
Economists remain divided on whether these measures will produce significant results. “The central bank is taking steps in the right direction, but structural issues remain,” said Michael Pettis, finance professor at Peking University. “Boosting consumption requires addressing income inequality and strengthening social safety nets.”
For ordinary Chinese citizens, the impact may take time to materialize. Many households have adopted cautious spending habits that won’t change overnight.
As China navigates these economic challenges, the central bank’s new focus highlights a recognition that sustainable growth requires stronger domestic consumption alongside traditional export strengths. The success of these measures will depend largely on implementation details and coordination with broader economic reforms.
