Assistant minister of the Ministry of Commerce (MOFCOM) Fang Aiqing revealed while having a collective interview on “activating circulation and promoting consumption” at the news center of the third Plenary Session of the 11th National People’s Congress on March 13 that this year, MOFCOM will adopt many supporting policies and measures to strongly boost the 5 pieces of work of expanding domestic demand and promoting consumption, including expanding hotspot consumption, rural consumption, service consumption, circulation consumption and credit consumption. Fang held that the annual target of CPI of roughly 3% is practical and realizable.

For the purpose of coping with the international financial crisis, a series of policies and measures released last year are of great effect to drive Chinese economic recovery. In 2009, the consumption drove GDP to rise 4.6 percentage points, with the contribution ratio of 52.5%, up 6.8 percentage points from 2008.

Fang introduced that MOFCOM will this year focus on “five big consumptions”, including hotspot consumption, rural consumption, service consumption, circulation consumption and credit consumption.

Expanding hotspot consumption mainly focuses on autos and home appliances to cultivate consumption hotspots. Fang said that China will this year continuously implement and carry out the policies on home appliances and autos and motorbikes going to the countryside, auto and home appliance replacement and the levy of purchase tax on small-displacement vehicles at the rate of 7.5%.

In terms of expanding rural consumption, the MOFCOM will continuously implement the policy of “Ten Thousand Villages and Thousand Towns” to set up one hundred thousand countryside stores and 1500 to 2000 distribution centers with the distribution rate of 50%.

The MOFCOM will also advance the development of green and low-carbon circulation pattern to expand circulation consumption, proactively push forward the construction of the renewable resource recycling system, build the regional terminal market and strongly develop the second-hand market.

Moreover, to perfect the finance guarantee and credit insurance mechanism and expand credit consumption is also one of this year’s key jobs. The MOFCOM will bolster the credit insurance and financing guarantee for small and medium-sized commercial enterprises, the improvement of method, the perfection of the mechanism and prevention and share of risks, with priority given to expanding the scale of credit consumption and boosting the development of credit consumption.

Source: Xinhua