China’s central bank should introduce new structural monetary policy tools to stimulate consumer spending and strengthen support for property and capital markets, according to a senior central bank adviser.
In an interview with the China Securities Journal published on Tuesday, Wei Gejun, an adviser to the People’s Bank of China (PBOC) and member of the Chinese People’s Political Consultative Conference (CPPCC), emphasized the importance of boosting consumer credit to drive domestic demand amid growing external pressures.
Consumer Spending in Focus
Wei proposed the establishment of structural monetary policy tools to encourage financial institutions to issue more consumer loans, creating a positive feedback loop where:
- Government policies stimulate consumption
- Higher consumption fuels market demand
- Market demand drives business investment
- Businesses expand investment and employment
This shift comes as China faces the looming impact of higher US tariffs on exports, making domestic consumption a key pillar of economic recovery.
Property Market Support
Wei also called for enhanced policy tools to support the ailing property sector, including increased funding for affordable housing projects.
China’s property market remains under pressure, with analysts predicting no significant recovery until 2026. Key policies rolled out last year — including interest rate cuts and targeted funding programs — have yielded limited results, prompting calls for more direct government intervention, such as state purchases of unsold apartments.
Capital Market Stability
To further bolster the capital markets, Wei urged the PBOC to expand two policy tools introduced in September, including a 500 billion yuan ($68.7 billion) swap program that grants fund managers, insurers, and brokers easier access to liquidity for stock purchases.
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