Overview

• China's State Council introduced a 'Special Action Plan' to transition the economy toward consumption-driven growth, reducing reliance on exports and investment.
• Key measures include wage increases, childcare subsidies, and a 300 billion yuan trade-in scheme for consumer goods like electric vehicles and appliances.
• Retail sales grew by 4% in the first two months of 2025, showing modest improvement but falling short of the ambitious 5% annual growth target.
• Analysts question the plan's effectiveness due to a lack of detailed implementation strategies and persistent challenges such as weak consumer confidence and a property market slump.
• The initiative comes as China faces heightened trade tensions with the U.S., including new tariffs, and seeks to stabilize its economy amidst deflationary trends.