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Retail sales to hit 10 trillion yuan by 2010

www.chinanews.cn 2006-02-13 09:48:16

(Source: China Daily)

Citizens shop in a super market in Weifang, East China's Shandong
Province in this photo taken on January 10, 2006.

Feb. 13 - China's retail sales will continue to grow at a fast rate over
the next few years, thanks to the government's increasing emphasis on
stimulating consumer demand.
Huang Hai, assistant minister of commerce, said the nation's retail
sales, an important indicator for the consumption demand, will grow at an
average annual rate of more than 11 per cent during the 11th Five-Year
Plan (2006-10) period.
"By 2010, the country's retail sales will reach over 10 trillion yuan
(US$1.2 trillion)," Huang was quoted yesterday as saying by Xinhua.
Earlier figures from the National Bureau of Statistics indicate that
China's retail sales rose 12.9 per cent year-on-year to 6.7 trillion yuan
(US$828.3 billion) last year.
Such a strong growth, fuelled mainly by rising household incomes and more
stable consumer prices, is just what the government wants to see, said Qi
Jingmei, a senior economist with the State Information Centre.
"The current economy relies too much on fixed asset investment, which
results in both overcapacity and trade friction," she said.
In developed countries such as the United States, consumption usually
accounts for 70 to 80 per cent of the gross domestic product (GDP), but
it accounted for just 33.3 per cent of China's GDP last year.
The government wants to let consumption play a more important role in its
future economic growth, Qi said.
Finance Minister Jin Renqing said late last year that the country's
fiscal policy will help boost consumption demand during the 11th
Five-Year Plan period.
Such fiscal measures will include an increased spending in the fields of
education, health care and social security, he said.
Zhuang Jian, a senior economist with the Asian Development Bank's
Resident Mission in China, said Jin's pledge is good news for both urban
and rural residents.
"With less financial burden, people will be more willing to spend," he
said.
The government has already taken a series of other measures to adjust the
relationship between investment and consumption, Zhuang said.
As of January 1 this year, the government raised the threshold on
personal income tax from 800 yuan (US$99) to 1,600 yuan (US$197), which
has increased the people's spending capacity by letting them keep more
money.
The government also gave up agriculture taxes and made compulsory school
education free in rural areas, which saves money for rural citizens.

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