Beijing is considering taking radical measures to stimulate economic growth.

A fresh round of disappointing Chinese economic data is increasing pressure on Beijing to continue easing fiscal policy, with some even suggesting handing out shopping vouchers to boost growth. Reuters reported this.The world’s second-largest economy lost steam in July as new home prices fell at the fastest pace in nine years, industrial production slowed and unemployment rose.

Other data beat expectations, but not for positive reasons. Higher inflation was blamed on bad weather rather than strong domestic demand, higher imports reflected purchases of advanced chips ahead of expected U.S. technology curbs, and higher retail sales were weighed down by weak numbers in 2023.

The government may consider criticism.

China took similar steps in October last year, raising its budget deficit to 3.8% of GDP from 3%. It also provided a portion of its 2024 debt quotas to local governments, to invest in flood prevention and other infrastructure. What could change this year is how the extra money is spent. After decades of heavy investment in bridges, roads and railways, traditional infrastructure projects are getting less and less returns.

Consumers who have cut back on spending have forced Chinese e-commerce giants like Alibaba Group Holding to offer big discounts and promotions to lure customers, putting pressure on retail profit margins.

Some suggest Beijing could consider issuing $139 billion in cash or coupons, equivalent to 0.8 percent of GDP last year. State media say that would mean widening the budget deficit this year or approving additional special treasury bonds.

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