China wants people to eat out and take in more trips and shows

This article was originally published by Radio Free Asia and is reprinted with permission.

China has set out plans to get the country’s 1.4 billion people to spend more on eating out, tourism and entertainment, in a last-ditch bid to rescue the flagging economy.

Governments across the country must step up measures to boost private spending on tourism, cultural attractions and eating out through promotional deals, local festivals and high-end restaurants, the country’s cabinet, the State Council, said in a directive published on its official website.

People should also be given tax incentives to spend more on care of the elderly and of children, including education, the document said, although it wasn’t clear whether the government would reverse a 2021 ban on the multibillion yuan private tutoring industry.

The announcement comes after coffee giant Starbucks posted a sharp drop in sales at stores across China, suggesting falling purchasing power among the country’s white-collar class.

Ruling Chinese Communist Party leader Xi Jinping has called for sweeping measures to stimulate consumer spending in a bid to revive the country’s flagging economy.

In April, the government urged households to replace domestic appliances, while automakers slashed prices in a bid to stimulate consumption in early 2023.

The government has even called childrearing as a patriotic way to increase consumer spending, offering a slew of economic perks for couples to have more children.

In keeping with this approach, the State Council said local authorities should also invest in daycare, and “guide schools to introduce third-party institutions with relevant qualifications to provide non-disciplinary high-quality public welfare after-school services,” the announcement, which was published Aug. 3 but dated July 26, he said.

And local governments should repurpose vacant venues and urban properties to hold sporting events, including winter sports, it said.

Vague policy goals

Online medical consultations and health checkups are also mentioned in the directive, as a way to meet “diverse and personalized healthcare needs.”

Governments at all levels should also crack down on false advertising and online fraud while protecting the rights of consumers, it said.

US-based economist Qin Weiping said much of the document was given over to sloganeering and vague policy goals, however, with scant detail about how the directive should be implemented.

He said it seemed to ignore the current lack of confidence among consumers in China.

“I think this (directive) is totally out of keeping with the current economic situation in China,” Qin said. “These so-called tasks … aren’t actually feasible — they’re just slogans devoid of specific policies.”

The document calls for “improvements” in the quality of online literature and performances, online gaming, and audiovisual content, and for further developments in immersive experiences and scripted entertainment.

But it was unclear whether the government was seeking to resurrect the now-defunct private tutoring industry that families had relied on for decades to try to get their children the best possible start in China’s hugely competitive education system.

A commentator who gave only the nickname Sky said the document had likely been masterminded by Premier Li Qiang, who heads the State Council.

“Li Qiang clearly lists the education and training industry as one of the five pillar industries chosen to promote service consumption,” Sky said. “This shows that Li Qiang has officially rebelled (against ruling Chinese Communist Party leader Xi Jinping).”

“Li Qiang has a pretty good understanding of economics,” they said.

Tinkering with previous measures

The insistence on rebuilding online services comes after Chinese financial regulators pulled the plug on a planned US$37 billion listing of Alibaba founder Jack Ma’s fintech Ant Group in November 2020.

But Qin said it seemed as if the State Council plan was “tinkering around the edges” of these earlier policy moves, rather than upending them.

“Their policies … totally disregard the development of enterprises and the economy, and don’t seem to care about employment prospects for ordinary people,” he said.

“The economic figures aren’t looking good, and their tax revenues have fallen significantly, so they are issuing this urgent guidance in place of specific policies,” Qin said.

Lucy, a former Chinese subject specialist in the private tutoring sector who now lives in the United States, said the call for more educational services suggests the economy “is really beyond redemption.”

She said the tutoring ban didn’t really address the deeper issues in the education system.

“It just entrenched class differences, and made it difficult for kids at the bottom of the ladder to move up it,” she said. “Now, they want to use education and training to stimulate consumption… which won’t be of much use.”

A parent from Shanghai who gave only the surname Chen for fear of reprisals said even government attempts to stimulate financial markets have had little result.

“They keep releasing good news, but it doesn’t have any impact,” he said. “Everyone, from ordinary people to officials, lacks confidence in the future.”