For Xi, Boosting China's Domestic Consumption Means Working Harder

The meetings last week of China's National People's Congress, or NPC, and the Committee of the Chinese People's Political Consultative Conference, or CPPCC, ended with commitments to maintain economic growth at around 5 percent, keep unemployment at 5.5 percent and increase the fiscal deficit target to 4 percent, the highest in 30 years.
However, the annual session of China's two-chambered rubber-stamp legislature, known as the "Two Meetings," did not include any detail, let alone surprises, for how the government might reach these ambitious targets.
On Sunday, however, the Central Committee of the Chinese Communist Party and the State Council, the main governing body of the government, jointly issued a 30-point Special Action Plan to boost consumption. Coming so soon after the Two Meetings, the announcement generated some enthusiasm that the focus on consumer spending demonstrates a renewed dedication to move away from Beijing's focus on export-oriented manufacturing, which has exacerbated tensions with trading partners from the U.S.
to Brazil, while fueling excess capacity, price wars and unhealthy competition in China.
As an action plan, the document itself is disappointing, because while it contains laudable goals - such as better enforcement of labor rights and increased payouts for the basic pension system - it does not specify how these can be achieved.
For instance, who will enforce China's strict but often ignored labor laws now that President Xi Jinping has dismantled labor rights organizations and weakened the trade union? Who will pay for the increased pensions when local governments already struggle to pay the salaries of civil servants? More fundamentally, will the central government finally reform the central-local fiscal relationship so that the local governments tasked with implementation of the plan have the resources to do so?
As a policy document, however, the plan is interesting and important, as it reveals how Xi's government envisions the role of consumption in a development model that is still solidly built on manufacturing and investment. As such, the plan is clearly in alignment with Xi's vision for China's economy. It's not that consumption has no role in boosting the economy, but that the role of consumption is subordinate to higher-level goals.
Indeed, even the ordering of the plan's seven sections reveal how consumption relates to these goals, such as revitalization of northeastern China through winter tourism and support for key goods, such as automobiles and consumer electronics, which have already been hit hard by external tariffs.
The plan to boost consumption resonates with many of Xi's admonitions over the years, including his slogan that the pathway to common prosperity is not through government handouts, but through hard work.
In effect, the plan sees the role of the Chinese consumer as intrinsically linked to the more important role of the Chinese worker on the productive side of the economy. Indeed, it is an almost quaintly Leninist depiction of the relationship between China's manufacturing juggernaut and the workers who fuel China's achievements in automotives, robotics, semiconductors and electronics, as well as basic consumer items from Shein apparel to Temu gadgets.
It resonates with many of Xi's admonitions over the years, including his famous critique of "welfarism" as encouraging laziness - or "lying flat" - and his slogan that the pathway to common prosperity is not through government handouts, but through hard work.
As such, work is paramount to the plan, which both encourages more employment and proposes ways to make employment easier. The first section highlights the need to boost incomes through employment, including support for "reasonable" increases in the minimum wage. The second section sets out recommendations to make work easier, especially for women of childbearing age and students.
This section highlights the government's anxieties over two social problems: the lo...