China is rolling out a subsidy for impoverished citizens as the world’s second-largest economy struggles to regain momentum.
The one-time payment is being allocated for “people in extreme poverty, orphans, and others in need,” the Ministry of Civil Affairs announced in a statement Wednesday. It added that the move aligns with President Xi Jinping’s directive to care for those in need.
Xi in 2021 declared a “complete victory” over extreme poverty. Beijing said nearly 100 million people had been lifted out of poverty through targeted programs during the leader’s first eight years in power. Newsweek reached out to the Chinese Foreign Ministry with a written request for comment.
After more than three decades of rapid growth, the number of Chinese living below the international poverty line, defined by the World Bank as $1.90 per day, fell by about 800 million, equivalent to 57 percent of the population.
Some analysts, however, questioned China’s poverty metric, which was set at $1.69 per day. State media has said that this was somewhat higher than the World Bank’s standard when adjusted for the costs of living.
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According to Wednesday’s statement, the Ministries of Civil Affairs and Finance are requiring local bureaus to prioritize this effort. They are urging careful review and standardization in distributing the stipends by October 1, or National Day, the 75th anniversary of the People’s Republic of China.
“The cash handouts ahead of the national holiday show that local and central governments are being more direct and proactive in policy support,” Marvin Chen, Bloomberg equity strategist, told the news agency. “Sentiment across China’s consumption sectors may improve in the near term with such coordinated stimulus.”
The statement did not specify the number of people set to receive the subsidies or how much the amount would be.
It is not unprecedented for Beijing to issue cash handouts ahead of major holidays. In 2015, World War II veterans received one-time payments of around $700 to mark the 70th anniversary of the war’s end.
China’s economy has struggled to recover following the end of strict pandemic measures and rolling lockdowns in late 2022. The country faces headwinds such as a property market crisis, high youth unemployment, an aging workforce, and low consumer confidence.
The payment announcement comes just two days after China’s central bank unveiled a bevy of measures to spur economic growth, the most ambitious since the pandemic.
These included reducing the amount of cash banks must hold; cutting one-year loan rates for financial institutions; and allocating $114 billion to help rescue the stock market. The bank also pledged to lower mortgage rates to help struggling homeowners.
Rising costs of living in China’s cities have contributed to the country’s declining birth rate. The nation also faces significant wealth inequality, per the Center for Strategic and International Studies, a think tank based in Washington, D.C.
