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China offers incentives to boost consumption

10 : 01 : 2012 China : Economy : Consumption
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Beijing – China’s economic development is in the hands of its consumers as the government introduces new incentives to drive domestic consumption this year.

Speaking at the China Ministry’s annual work conference last week, minister of commerce Chen Deming said: ‘Despite a challenging global economic situation, China’s economic development features many favourable conditions at home in 2012.’ He added that the government would boost domestic consumption while improving the country’s foreign trade structure.

With subsidies and tax breaks for cars and appliance purchases ending soon, officials are expected to announce new policies to stimulate consumption. Policies such as supporting the consumption of energy-saving and environmental-protection products will focus on the recycling of used electronics and vehicles, said Chen. Energy conservation, environmental protection and emissions reduction will be the focus of the new policies for the ministry’s Department of Circulation Industry Development.

Driving advances in logistics in rural areas will be another focus for the ministry, said Chen. The government aims to improve the quality of shops in the thousands of rural villages previously highlighted in the ministry’s 2005 rural villages marketing project.

Expanding consumption of online retail also falls into the ministry’s task of expanding domestic consumption. Chen said the government would release online shopping regulations and establish a credit system for e-commerce to promote the sector’s development.

Retail sales are expected to increase by 15% a year between 2011 and 2015 to reach Rmb32 trillion ($5 trillion) by 2015, according to the ministry, while total retail sales, including rural areas, would post a year-on-year increase of 14% in 2012.

In 2012 LS:N Global will focus on emerging markets. Look out for a report on China in May.