Economists advocate direct support to consumers

Think tanks say $139b backing via cash or vouchers can help boost demand

China's central government should consider additional direct support to consumers worth at least 1 trillion yuan ($139 billion) — either cash or vouchers — in the rest of the year to effectively address the pressing challenge of lackluster domestic demand, economists from government-backed think tanks said.

The likelihood of the Chinese government directly subsidizing consumers — a policy widely seen in developed economies — has significantly increased, they said, citing that a top-level meeting has decided to shift policy focus more toward boosting consumption.

Such a step, which would necessitate expanding this year's deficit ratio or approving additional special treasury bonds, can play a significant role in reviving the country's consumer sentiment and accelerating the transition of economic drivers in the face of trade tensions, they said.