Last July, Chinese regulators imposed a fine of nearly US$1 billion on the Jack Ma-backed Ant Group for “illegal acts” related to corporate governance, financial consumer protection, participation in the business activities of banking and insurance institutions and other areas.
The penalty ended an investigation into the tech giant that kicked off in 2020.
The probe was seen as the start of the government’s campaign to bring the nation’s most influential tech companies and billionaire entrepreneurs to heel.
In July 2021, China announced a clampdown on private tuition to reduce the academic burden and pressure on students.
Curbs included requiring after-school tuition centres to register as non-profit organisations and prohibiting both online and offline tutoring over the holidays and weekends.
MEETING DIVERSE CONSUMPTION NEEDS
The 20 guidelines come in the wake of official data showing the world’s second-largest economy grew 4.7 per cent in the April-June quarter. It was the slowest since the first quarter of 2023 and missed a 5.1 per cent analyst forecast in a Reuters poll.
China’s protracted property downturn and employment insecurity are dampening economic recovery after strict pandemic measures were lifted at the end of 2022.
One economist told the state-owned news outlet Global Times that promoting high-quality service consumption would contribute to the “balanced and sustainable growth of China’s economy”.
According to economist Cao Heping from Peking University, many of the service consumption areas cited are those that need to be further developed to increase China’s national income levels.
In an opinion piece published on the state-run China Internet Information Centre, one analyst wrote that the measures proposed reflect “new ideas to promote consumption growth”.
Associate research fellow Liu Jintao from Renmin University of China wrote that the measures, such as developing the silver economy and opening up high-quality education resources to meet the diverse needs of the public, could help the ageing population.
They can also enhance the skills of the people by meeting the “diversified consumption needs of relevant groups”, thus achieving quality economic growth.
The government’s new plan to promote consumption does not include proposed budgets.
Instead, income tax reductions are planned to offset the cost of caring for children under three and senior citizens, according to the document.
Beijing also pledged to ensure that eligible small businesses in the service sector can benefit from greater financial support, particularly from banks.
The plan calls for more food-themed festivals to be held, and for the promotion of street food popular with locals. It pledges to encourage major foreign companies in the food and beverage industry to open their first outlets in China.
Last month, Chinese leaders signalled that the stimulus measures needed to reach this year’s economic growth target will be directed at consumers, deviating from their usual playbook of pouring funds into infrastructure projects, Reuters reported.
The world’s second-largest economy faces deflationary pressures, with retail sales and imports significantly underperforming industrial output and exports.
The Politburo, a top decision-making body of the ruling Communist Party, pledged at the end of its July meeting to make “countercyclical adjustments” to meet an economic growth goal of roughly 5 per cent for the year.
