China’s new economic expansion plan set to boost luxury

0

What happened: Last August, the Chinese Ministry of Commerce drafted its comprehensive plan to cultivate international consumption hub cities. The strategy calls for the country to create “international consumption hubs” in five major Chinese cities: Shanghai, Beijing, Guangzhou, Tianjin and Chongqing.

These five metropolises will adopt “energetic and distinctive measures in this regard with their respective axes”, relayed the Chinese media, People’s Daily. Additionally, cities will have special economic zones to boost China’s duty-free economy, further boosting growth and consumption.

Meanwhile, at the sixth session of the 15th Shanghai Municipal People’s Congress, Shanghai Mayor Gong Zheng announced that Shanghai plans to extend tax relief.

The Jing plug: Chinese policymakers have taken important steps to keep the economy buoyant and consumption healthy. At the same time, the expansion of duty-free zones will accelerate the repatriation of spending, directing sales towards national brands. Luxury brands and conglomerates will also benefit from the move, as Chinese consumers will shop less internationally.

Baidu believes that these policies “will help accelerate the quality and improvement of consumption, promote the formation of a strong domestic market, and unlock the domestic cycle.” In addition, recent income tax cuts should also boost household spending. China’s State Council points out that the recent measures are expected to reduce annual personal income tax by $17.3 billion (110 billion yuan).

This injection of cash will reduce the pressure on big brands, as it should help attract luxury consumers to stores, which will hopefully boost retail sales again.

The Jing Plug reports on high-profile news and features our editorial team’s analysis of key implications for the luxury industry. In the recurring column, we analyze everything from product declines and mergers to heated debates popping up on Chinese social media.

Share.

About Author

Comments are closed.