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Govt to increase spending power of rural residents

By Fu Yu (China Daily)
Updated: 2008-12-02 16:35

The Chinese government has reaffirmed its commitment to stabilizing the real estate and stock markets, and to boost auto sales.

Special coverage: Fiscal Stimulus Package Related readings:  China to make new investment in rural schools  Shot in the arm for rural infrastructure  Bridging the urban and rural gap  Guangdong to bolster growth with rural resources

The National Bureau of Statistics director Ma Jiantang said in a published article that the government would eliminate "consumption bottlenecks" to promote consumer demand. In the article published in Qiushi, a Communist Party journal, Ma wrote that the government would try to increase the spending power of lower income groups and to raise the desire to consume among the well-to-do.

The government has also planned to raise agricultural produce prices to help increase rural income levels. In addition, it will raise subsidies on seeding and farm machinery, and to increase some social benefits to farmers and low-salary rural workers.

In his analysis, Ma said consumers in rural areas have a strong potential demand for a wide range of consumer products and services.

He believes the $586 billion economic stimulus package will have the effect of encouraging increased spending by higher-income consumers, which will help boost investment.