China’s new economic plan will reignite investor trust amid waning US confidence
China is making a decisive play to reclaim its position as a magnet for global investment – just as Trump’s America looks increasingly like a volatile and unreliable bet.
This is the analysis of Nigel Green, CEO of global financial advisory giant deVere Group following China’s launch of a sweeping Special Action Plan to Boost Consumption.
He says: “Beijing is offering the clearest signal yet that it’s serious about revitalizing domestic demand, stabilizing financial markets, and reassuring foreign investors who have been wary of its shifting policies in recent years.
“The contrast with the US could not be sharper. While Washington leans into economic unpredictability – protectionist trade rhetoric, deficit concerns, and policy zigzags – China’s presenting itself as a recalibrated, more investor-friendly alternative.
“For those investors who had turned their backs on China, now is likely to be the time they will take a second look.”
China’s latest plan is focused on strengthening consumer confidence, reducing household financial burdens, and creating a more stable investment environment. The initiative, announced Sunday by the General Office of the Central Committee, outlines a multi-pronged approach.
First, consumption as the engine of growth. Policymakers are prioritizing domestic demand, aiming to “enhance consumption capacity by increasing income and reducing burdens.” This is critical given the sluggish consumer landscape, with February’s consumer price index registering its steepest decline in over a year.
Second, stock market stability. Beijing is pledging “multiple measures” to stabilise equity markets, a direct response to concerns that regulatory uncertainty had dampened investor confidence.
Third, new investment vehicles. The plan includes the development of more bond products tailored to individual investors, expanding wealth-building opportunities and financial market depth.
Markets have responded. The CSI 300 and Hong Kong’s Hang Seng Index both registered gains of 0.1% on Monday, “suggesting early optimism,” notes Nigel Green.
But the bigger question is whether this marks the beginning of a sustained shift in foreign capital back to China.
China’s Premier Li Qiang underscored last week that boosting consumption would be the government’s top economic priority for the year ahead. The urgency is clear: deflationary pressures have taken hold, with the producer price index in contraction since October 2022. Beijing knows that without restoring confidence—both among its own consumers and international investors—it risks losing ground in global financial markets.
“For retail, and more importantly, institutional investors who pulled capital from China amid regulatory crackdowns and economic uncertainty, this could be a moment of reassessment. The promise of stability, pro-growth policies, and targeted stimulus may outweigh lingering concerns about policy shifts.”
China’s strategic recalibration comes just as America’s investment appeal is slipping. With Trump’s return to the White House, businesses and investors are bracing for another round of unpredictable policy moves. Concerns range from heightened trade wars to fiscal mismanagement and market volatility.
The deVere CEO continues: “The US has traditionally been a haven for global capital, but confidence is eroding due to Trump’s aggressive tariff escalations and erratic policymaking.
“For investors weighing stability and long-term growth, China’s pragmatic economic approach may begin to look increasingly attractive by comparison.”
He concludes: China’s latest policy rollout signals a willingness to adjust course in order to win back global capital.
“Whether this translates into a full-scale revival of foreign investment remains to be seen, but the momentum is shifting.
“As US markets contend with growing uncertainty, the world’s second-largest economy is positioning itself as a more predictable, opportunity-rich alternative.”