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In response to the ongoing trade war with the United States, China has launched a significant spending stimulus aimed at boosting domestic consumption.

This move comes as President Donald Trump's tariffs threaten to slow China's export-driven economy.

On Monday, Chinese officials outlined a plan to increase domestic demand and encourage consumer spending. Che Shiyi from the People's Bank of China mentioned that the central bank is exploring new tools to provide low-cost funding in key consumption sectors.

In addition, the Chinese government has allocated an initial 81 billion yuan ($11.2 billion) to local governments for a rebate program to promote auto and appliance sales, according to Li Chunlin, vice chairman of the National Development and Reform Commission.

The government's latest efforts are part of a broader plan to counter a sluggish economy, which has been hit by external challenges, including Trump's trade tariffs.

According to AP News, the US president imposed a 20% tariff on Chinese products, further straining an economy that relies heavily on exports. Despite this, Chinese officials are optimistic, noting that the country's foreign trade system has shown resilience.

"China's industrial system is complete, and its innovation capabilities are gradually improving," said Fu Linghui, a spokesperson for the National Bureau of Statistics.

China's Economic Growth Plan Targets 5% Growth Amid Deflation Concerns

However, challenges persist. The Chinese economy faces weak consumer confidence and a protracted downturn in the housing sector, which continues to drag on growth. Real estate investments fell by 9.8% in the first two months of the year, further dampening consumer spending.

Despite these difficulties, recent data shows signs of improvement. Retail sales rose 4% in January and February, surpassing expectations, and industrial production increased by 5.9%, CNN said.

While this indicates some economic recovery, analysts warn that the broader issues, including deflation and a sluggish property market, may hinder sustained growth.

The government's new plan also includes expanding subsidies and benefits, such as increasing health insurance for rural residents and raising the minimum pension age.

Officials are also promoting initiatives like artificial intelligence products and winter tourism in regions with heavy snowfall to stimulate the economy.

Premier Li Qiang, in a speech earlier this month, emphasized the government's commitment to ensuring China's economic stability, targeting a growth rate of around 5% for the year. However, he acknowledged the need for more work to build consumer confidence and expand domestic demand.

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China