By Kevin Yao
BEIJING (Reuters) -China has set out plans to expand domestic consumption and investment, the official Xinhua news agency said on Wednesday, as the economy struggles with COVID and weakening external demand.
Chinese policymakers face multiple challenges as an abrupt relaxation of harsh COVID-related restrictions ushers in a surge of infections, hitting businesses and consumers, while a weakening global economy hurts Chinese exports.
Boosting domestic demand will help China to pursue higher quality economic growth and cope with external risks and challenges, Xinhua said, citing the 2022-2035 plans issued by the cabinet.
China aims to boost the scale of consumption and investment to a new level by 2035, significantly reduce income gaps between urban and rural residents, and make substantial progress in the country's "common prosperity" drive, Xinhua said.
"We must firmly implement the strategy of expanding domestic demand, expand residents' consumption and effective investment, enhance the resilience of economic development, and promote sustainable and healthy economic development," Xinhua said.
Beijing will support citizens' "reasonable" demand for housing and curb speculative investments, encourage the transition to electric vehicles, and boost the supply of higher quality consumer goods and of healthy farm produce, Xinhua said.
China will also increase consumption in the areas of culture and tourism and will reduce the financial burden for families of raising children, parenting and education, state media said.
China will step up infrastructure investment in energy, transport, logistics, water conservancy, as well as in 5G, AI, big data, and channel more funding into advanced manufacturing sectors, Xinhua said.
China will expand the scale of bond financing and promote bond market connectivity, Xinhua added.
The move to boost domestic demand will support China's "dual circulation" strategy, Xinhua said, referring to plans to encourage greater reliance on the internal cycle of production, distribution and consumption, supported by innovation and upgrades in the economy.