China has introduced a comprehensive “special action plan” to boost domestic consumption and counter the economic pressures from U.S. tariffs imposed by former President Donald Trump. Announced by Xinhua news agency, the plan includes measures such as increasing household incomes, establishing a childcare subsidy system, and expanding a “cash-for-clunkers” initiative to encourage the trade-in of old goods like cars and electronics.

The initiative aligns with Premier Li Qiang’s goal of achieving a 5% growth target for 2025, aiming to reduce China’s reliance on exports. However, the country faces several challenges, including weak consumer spending, uncertain job prospects, and a struggling property sector. The ongoing trade war, with Trump doubling tariffs on Chinese imports to 20%, adds additional pressure.

In response, China imposed retaliatory tariffs on U.S. agricultural imports. Despite these efforts, data from the National Bureau of Statistics showed a modest 4% rise in retail sales for January and February, reflecting a recovery, though economists caution that the broader economic environment remains challenging, with deflation dampening consumption and inflation at its lowest point in over a year.