The Chinese economy shows signs of improvement amid the escalation of trade war economy

In light of the escalation of trade tensions between China and the United States, recent economic data showed signs of improvement in the Chinese economy supported by government efforts to enhance local spending and face continuous challenges.

According to the Associated Press, these developments come at a time when the administration of US President Donald Trump imposed 20% customs duties on Chinese products, which increased pressure on the Chinese economy, which depends heavily on exports.

Government movements to revive consumption

The Chinese State Council revealed a “special action plan” aimed at enhancing local consumption, as the procedures include increasing citizens ’income and establishing a program to support children’s care.

The move comes-according to Reuters-in light of the low levels of consumer demand in recent years due to the effects of the Kofid-19 and the ongoing real estate crisis, which led to the weak confidence of consumers and the slowdown in inflation.

According to a report issued by the State Council, the plan was directed to all regions and government agencies “to enhance consumption strongly and expand the scope of local request in all directions, and improve purchasing power by increasing income and relieving burdens.”

Li Shonlin, Vice -Chairman of the National Development and Reform Committee, also announced that the government allocated 81 billion yuan ($ 11.2 billion) to local governments last January as part of a discount program aimed at stimulating car sales and home appliances, according to the Associated Press.

Improved economic indicators

The data of the Chinese National Statistical Office showed that retail sales in China increased by 4% during the months of January and February last compared to last year, while industrial production recorded a growth of 5.9%.

Despite this improvement, the real estate market is still a major challenge, as real estate investment decreased by 9.8% during the first two months of the year, which led to a decline in consumer confidence, according to the Associated Press.

A spokesman for the Statistical Office confirmed that “the economy is going in the right direction, but it still faces great challenges internally and externally,” noting that the continuation of the real estate crisis and commercial tensions with the United States increases economic pressures.

Despite the economic challenges facing China, there are positive indications of recovering its economy, supported by government motivational policies, which included providing financial support and measures to increase income and enhance spending. However, continuous geopolitical tensions, whether between China and the United States or between Russia and Ukraine, continue to cast a global economy.