Core Viewpoint - The primary goal of stimulating consumption is not merely to encourage spending but to ensure that the money spent can stimulate economic growth and be recaptured by the government through taxation [4][18]. Taxation and Consumption - The largest tax in China is the value-added tax (VAT), which is levied on the value added at the production stage, making it an indirect tax that does not directly relate to consumer spending [4][19]. - This taxation logic leads local governments to favor investments in production over promoting consumer spending [20][21]. Planned Consumption Policies - Consumption policies are designed with a plan, aiming to direct consumer spending towards areas deemed beneficial by the government [6][30]. - The government does not encourage spending on luxury goods or small-scale street vendors, as these do not contribute significantly to tax revenue [7][10][32]. Consumption Loans and Subsidies - The two main tools for stimulating consumption are consumption loans and various rural policies, which are structured to align with tax revenue logic [31][32]. - Consumption loans are primarily directed towards large purchases like home appliances and vehicles, which are associated with larger enterprises that can reliably pay taxes [11][12][32]. Financial Mechanisms - The funding for consumption loans comes from banks and financial institutions rather than direct government spending, allowing the government to stimulate demand without immediate fiscal outlay [12][33]. - This approach contrasts with direct cash transfers, which are irreversible and do not allow for recapture of funds [13][37]. Rural Policies and Real Estate - The most significant rural policy is related to real estate, encouraging rural residents to purchase urban properties, which generates substantial tax revenue for local governments [15][35]. - Real estate development provides dual benefits: land transfer income and comprehensive tax contributions from various real estate-related taxes, which far exceed the benefits of ordinary consumer spending [35][36].