China is pivoting away from consumer subsidy efforts and toward combating deflation and price wars.
Beijing had earlier vowed to prop up the economy and boost demand amid a burgeoning trade war. But China’s top policymaking body on Wednesday signaled little appetite for major new stimulus programs, instead pledging to tackle “disorderly competition” that has tanked prices in the electric vehicle market and other industries: Consumers briefly got milk tea for free because of a fierce price war between delivery platforms earlier this month.
Beijing now recognizes that overcapacity — fueled by government investment that’s spurred myriad copycat factories — “is not just a headache for China’s trade partners but also poses challenges for China’s economy in its own right,” an economist said.