China rolls out 18-point plan to boost rural spending amid growth slump

China's Premier Li Qiang called on officials to ramp up economic support after July data revealed broad-based weakness across the economy, with growth likely slipping further below Beijing's annual target. Speaking at a State Council meeting on Monday, Li warned that "the problem of insufficient domestic demand remains prominent" and that "some industries and enterprises are facing increasing difficulties."wdez+1

The remarks came after government data showed industrial output, retail sales, and investment all softened more than expected in July. Retail sales grew just 0.6 per cent year on year, down from 1 per cent in June, while property investment fell 19.2 per cent in the first seven months of the year.scmp+1

Li Pledges Incremental Policies

"We must anchor efforts to development goals, give full play to the effectiveness of existing policies, and promptly formulate practical and effective incremental policies," Li said, urging officials to "strive to achieve" annual economic targets. He pledged to accelerate major infrastructure projects including the "Six Networks" program and to focus on sectors with expansive supply chains to unleash domestic demand.bloomberg+1

Li also called for efforts to stabilize external demand, though he did not elaborate on how the government would achieve that goal. China's second-quarter GDP growth of 4.3 per cent landed below Beijing's full-year target of 4.5 to 5 per cent, with economists at Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.03% and Citigroup ↘ 0.62% warning that forecasts for a third-quarter pickup could be in doubt.theedgemalaysia+1

Rural Markets Targeted in 18-Point Plan

In a separate but related move on Tuesday, China's Ministry of Commerce issued an 18-point guideline aimed at boosting consumption in counties and smaller cities. The measures include renovating township commercial centres and rural markets, encouraging brands to open regional debut stores, and supporting new-energy vehicles and green products.business-standard+1

County and township markets accounted for 39.2 per cent of China's retail sales in the first half of the year, according to the commerce ministry. Lower-tier markets represent about 70 per cent of China's population and 60 per cent of total retail sales, making them a largely untapped source of demand.scmp+1

Analysts Expect Measured Response

Despite the urgency in Li's language, most analysts do not expect an immediate surge of fresh stimulus. Macquarie economists said Beijing would likely stick to its "Just Enough" rule — "doing just enough to achieve the growth target, but no more" — given resilient exports driven by the global AI infrastructure buildout. Goldman Sachs economist Lisheng Wang wrote that the government would likely accelerate bond issuance and spending while keeping the door open to additional easing if growth slows further.theedgemalaysia