China pledges deeper economic reforms

New measures will be introduced to boost consumption， especially for vehicles and electrical appliances， as export demand weakens， China Daily reported.

With tax rebate policies on vehicles and appliances having expired or due to expire， “new measures are in the pipeline” to boost consumption， said Huang Hai， former assistant minister of commerce and member of the economic and trade policy consulting committee affiliated to the Ministry of Commerce.

“The Ministry of Commerce has drafted a proposal to continue the stimulus programs in the coming few years， but in different ways， and they are expected to cover vehicles and those related to real estate， say household appliances，” Huang told China Daily in an interview.

The measures may include subsidies for consumers in affordable housing to buy appliances and for those planning to change their cars.

Ministry of Commerce spokesman Shen Danyang also said the ministry is mulling over launching new programs on expanding domestic consumption.

Huang also disclosed that under the instructions of Premier Wen Jiabao a national circulation conference， the first of its kind， will be held around April.

Government officials will discuss how to introduce concrete measures to boost consumption at the conference， he added.

More than 10 central government departments including the Ministry of Commerce， the National Development and Reform Commission and the Ministry of Finance， are expected to make proposals after conducting research before the conference， Huang said.

China has sought to sustain fast economic growth through boosting domestic consumption， given the fact that export growth has been declining during the past few months with demand weakening from the European Union， China’s largest trade partner.

In November 2011， the nation’s exports increased by 13.8 percent from a year earlier， the smallest gain since 2009， according to the General Administration of Customs.

The Ministry of Commerce has predicted that a slowdown in the country’s export growth could continue at least into the first quarter of 2012 with a “more severe” outlook.

“This year in China will be all about trying to ensure a soft landing，” said Jim O’Neil， chairman of Goldman Sachs Asset Management.

“Growth， under downward pressure from weakening exports and a fall in governmentsponsored investment， will have to be led by stronger personal consumption if the economy is to grow by more than 8 percent.”

It was agreed at the annual Central Economic Work Conference in December that China will be committed to expanding domestic consumption and improving people’s livelihood while trying to stabilize exports.

Since the global financial crisis in 2008， the government has launched a series of preferential polices encouraging local consumers， through subsidies， to renew or purchase household appliances and cars.

“No matter whether the nation’s economy slows down or not， China will have to change its economic growth model to consumption-oriented， rather than export-or investment-driven，” said Lu Zhengwei， chief economist with Industrial Bank Co Ltd.

China’s State Council， or the Cabinet， on Feb. 15 pledged to push for deeper reforms to address the country’s economic problems， Xinhua News Agency reported.

The government will use reform to solvedeeply rooted structural problems that are hampering the country’s development， according to a statement released after a State Council executive meeting presided over by Premier Wen Jiabao.

The government promised policy improvements in the non-public sector to encourage private capital to enter fields that were previously monopolized by the state， including railways， municipal administration， finance， energy， telecommunications， education and health care， according to the statement.

China will expand a pilot program for value-added tax adjustments and advance resource tax reforms， the statement said.

To make financial services more accessible， the statement said China will actively cultivate small-scale financial institutes to target small- and micro-sized businesses， adding that the government will work to properly guide private financing.

Electricity， refined oil and water pricing mechanisms will also be reformed， the statement said.

Reforms in rural areas will include regulations on the expropriation of collectively-owned land.

Other reforms discussed during the meeting included policy adjustments in the areas of social service， administration and foreign investment， according to the statement.

Figures

0.3%

China used 9.997 billion U.S. dollars of foreign direct investment (FDI) in January， down 0.3 percent year-onyear， the Ministry of Commerce (MOC) said on Feb. 16.

50.1%

China’s reliance on foreign trade dropped to 50.1 percent in 2011， indi- cating that the economy is transferring to a more inner-led growth mode， the General Administration of Customs(GAC) said on Feb. 15.

$73.19b

The central government has invested 461.1 billion yuan ($73.19 billion) in forestry over the past six years， the State Forestry Administration said on Feb. 15.

21.9%

China’s spending in research and development (RD) last year surged 21.9 percent year-on-year to 861 billion yuan($139.7 billion)， the country’s statistical authority said on Feb. 22.

22.6%

China’s tax revenues surged 22.6percent year-on-year to 8.97 trillion yuan($1.42 trillion) in 2011， the Ministry of Finance said on Feb. 14.

$14.2t

China’s foreign exchange market

saw its transaction volume hit

$14.2 trillion in 2011， up four

times from 2006， the coun

try’s forex regulator said on

Feb. 13.

5.5b

China’s central government will invest 5.5 billion yuan ($873 million) this year to clean up pollution in the country’s rural areas， the Ministry of Finance (MOF) said on Feb. 13.

0.5%

China’s exports dropped 0.5 percent year-on-year in January， the first decline in two years as a week-long holiday distorted trade figures， official data showed on Feb. 10. on Feb. 9.

3%

China’s foreign exchange regulator said on Feb. 9 that the country’s current account surplus would account for around 3 percent of the GDP in 2011.