State Council vows to boost tourism amid uneven recovery

China’s highest administrative body, the State Council, has announced a series of consumption-boosting measures after the second quarter saw underwhelming growth figures.

Culture and tourism will be one of the key sectors targeted by the measures, which were announced following a key economic policy-making meeting on July 25. The specific measures suggested to “enrich culture and tourism consumption” include lowering or removing the cost of tickets at scenic spots, extending opening hours for museums, amusement parks, and cultural centres, and creating new immersive spaces for performance arts.

The government also hopes to promote the consumption of electric vehicles (for example by improving the infrastructure for charging stations in rural areas) as well as expand the availability of affordable rented housing. 

Some commentators point out that the raft of measures stops short of direct fiscal support for consumers and companies, which could come in the form of cash subsidies as were provided during the early stages of the pandemic. Instead, as the above measures indicate, the government is focussing on bolstering supply rather than demand.

China’s economy grew 6.3% year-on-year in the second quarter, less than the market prediction of 7.3%. Retail growth was particularly weak, continuing this year’s pattern of faltering consumer confidence.

Whilst China is on track to meet the government’s modest goal of 5% growth for the entire year, analysts are concerned that the sluggish economic recovery may be symptomatic of deeper structural issues – namely China’s dependence on its property sector, which contributes around 17-29% of GDP.

The spiralling youth unemployment rate is another major concern. At a record 21.3% and likely to climb higher, more private sector jobs are needed for fresh graduates, but the crackdown-ravaged sector still lacks the confidence to provide them.


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