Policymakers release measures to support service consumption
On Tuesday, the Ministry of Commerce and eight other ministries released a policy document aimed at boosting services consumption.
Bummer alert: The measures offer nothing new in the way of subsidies or financial support to boost consumer spending.
Instead, policies are focused on expanding the diversity and quality of service offerings by lowering market barriers for foreign service providers.
- This includes MNCs operating in culture, healthcare, telecom, education, foreign sports events, and leisure and vacation services.
ICYMI: In late August, Premier Li Qiang called for greater foreign competition to drive up the quality of service provision.
To increase aggregate demand for services, policies are focused on attracting more foreign tourists, by:
- Expanding visa-free travel policies
- Improving accommodation, payment options, and mobile service provision
- Encouraging foreign students to study in China
Get smart: Beijing wants to have its cake and eat it too.
- Policymakers want services expenditure to boost overall consumption – but aren’t willing to provide the financial support needed to achieve it.
Get smarter: The government stimulated a dramatic increase in the demand and supply of consumer durables through its equipment upgrading and consumer goods trade-in program.
- Similar demand-side incentives and subsidies are needed to engineer a material increase in services consumption.
MNCs should be on the lookout: The pledge to lower market barriers could create market opportunities for foreign service providers.