Andrew Batson
@andrewbatson
A lot of people feel like China's "special action plan" on boosting consumption has too little action, or too much planning. These are understandable reactions, but I think misread the nature of the document, which is fundamentally political not economic.
Pretty much by definition, a document issued by the Central Committee of the Communist Party is not going to be a technical economic plan. Nor could a document published AFTER the government budget have any fiscal commitments not already in the budget.
The purpose of the plan is to send political signals first of all to cadres throughout the government, and second of all to the population at large. It's a declaration that the work broadly characterized as "boosting consumption" is of the highest political importance.
But here "boosting consumption" does not mean technical goals such as raising the consumption share of GDP, or achieving a certain growth rate of consumption. Which is why people interested in those things are likely to find it frustrating.
Instead it is about what Premier Li Qiang, in his government work report, called "people-oriented macro policies." I would summarize it as the government doing things that people will notice affecting their daily lives in tangible and positive ways.
They are looking to generate these kind of reactions: "My dad's pension just went up." "I got a new phone for basically free." "They finally installed an elevator in my building." "I can finally afford childcare." (these are all actual things in the plan)
Viewed this way, the primary goal of the plan is to solve a political problem: that people don't feel the government is improving their lives. If it works, the plan might have economic effects (higher confidence, lower savings rate), but it's not narrowly about those.
It's always been my feeling that the top-down narrative of the last few years, with its overriding focus on technological self-sufficiency (explicitly) and war preparation (implicitly), is not actually that popular within China outside the nationalist right.
So I'd take the consumption rhetoric as the government's recognition that it needs a broader program that speaks to people outside the tech sector. It doesn't mean scaling back goals for tech, just recognizing that they aren't the be-all and end-all of politics.