MOC: China will Increase Fiscal Subsidies to Boost Domestic Demand Focusing on R

CCTV reported that Chinese Minister of Commerce (MOC) Chen Deming said on March 3 that, facing the continued shrinking of foreign demand, China will adopt various measures such as increasing fiscal subsidies to further boost domestic demand and expand domestic consumption.

Chen said, "By the end of 2008, savings deposit balances in China reached 22 trillion yuan. Large amounts of savings have become a reservoir for consumption. As long as there are beneficial consumption policies and the environment for consumption is improved, we can transform a certain amount of savings into consumption."

Chen pointed out that developed countries are beginning to show signs of a new round of financial deterioration. In February, the Consumer Confidence Index in the US and Europe dropped to new lows. The international financial crisis has inflicted heavy losses on the real economies of these countries, which has also led to a rapid shrinking in China's external demands. Intensifying efforts to boost domestic demand and expand consumption is the top priority for maintaining the rapid growth of China's economy.

Chen said that invigorating circulation is the key to expanding consumption. The central budget will substantially increase funding for the development of the rural logistics service system. In addition, China will also intensify its efforts to increase fiscal subsidies for rural consumption.

This year the central budget initially allocated 20 billion yuan of subsidy funding to the Home Appliances for the Countryside program, which Chen estimates will generate over 150 billion yuan for home appliance consumption in rural areas.

By People's Daily Online