The Chinese government announced it will distribute one-off cash handouts to people living in extreme poverty before the upcoming National Day holiday, a move seen as an attempt to boost consumption and address concerns over an economic slowdown, Bloomberg reports.
The announcement comes just a day after Beijing unveiled a sweeping economic stimulus program, including rate cuts and easing measures aimed at reviving the world’s second-largest economy. The Ministry of Finance and the Ministry of Civil Affairs will issue living subsidies to disadvantaged groups, including the very poor and orphans, before the October 1 holiday, according to a report by state broadcaster CCTV.
The exact amount of the handouts remains unclear, but the deployment of direct aid within such a short timeframe represents a departure from the government’s traditional approach of avoiding “welfarism.” This strategy has long been championed by President Xi Jinping.
The move comes amid growing concerns over weak consumption, fueled by a property slump and gloomy job market. Prominent economists, including Huang Yiping, a member of the People’s Bank of China’s monetary policy committee, have urged the government to step up spending to address the issue.
“Cash handouts to households would boost consumer spending,” Huang said earlier this year, arguing that an excessive focus on fiscal health could hinder the economy.
With the central bank already taking significant steps to stimulate the economy, the spotlight now shifts to the Ministry of Finance. Observers expect more fiscal measures in the coming days, with the 24-member Politburo set to meet before the National Day holiday.
The National Day, which marks the anniversary of the founding of the People’s Republic of China, is typically associated with massive travel and consumption. However, the current economic climate has dampened spending, prompting authorities to take proactive measures to boost consumer confidence.
