Ahead of the annual meetings of China's top legislature and top political advisory body, known as the two sessions, Yu Xiangrong, head of Greater China Economics at Citi, suggested policymakers significantly raise childcare subsidies, arguing that such support could deliver a stronger multiplier effect than other stimulus measures, and more effectively boost household spending.

Boosting consumption is expected to be one of the hot topics at the two sessions. Yu framed consumption as the top priority of China's current macroeconomic agenda, emphasizing that boosting domestic demand should not be seen as a stopgap measure, but as a strategic shift in China's growth model. He noted that households with children typically display a higher propensity to spend. Therefore, substantial increases in childcare subsidies, he argued, would not only ease the financial burden on families but would also translate more quickly into spending on goods and services, thereby amplifying the policy multiplier.

Lyu Jinkai contributed to this story.