China Will Boost Consumption Amid Global Slowdown, Commerce Minister Says
The government is studying policies to encourage spending on energy-saving products, and will take other measures including the promotion of online shopping and tourism, Chen told the ministry’s annual works conference, according to a statement posted on its website yesterday.
Policy makers have cut taxes to spur consumption and help sustain growth in the world’s second-largest economy as Europe’s debt crisis clouds the outlook for exports and a property crackdown damps investment at home. Premier Wen Jiabao said Jan. 3 that business conditions may be “relatively difficult” this quarter.
“Chinese policy makers will be under tremendous pressure to speed up rebalancing reforms and to roll out pro-consumption policies in 2012,” Yao Wei, a Hong Kong-based economist with Societe Generale SA, said in a note this week.
Chen’s speech didn’t specify any measures, although the China Daily said Jan. 4 they may include subsidies for purchases of vehicles and household appliances. The newspaper cited former Assistant Commerce Minister Huang Hai.
“While the world economy will recover slowly, downward pressures have increased markedly,” Chen said, according to the statement. “The situation is serious and complicated.”
The ministry will promote steady export growth this year and expand trade with emerging markets, Chen said. Export tax rebate policies will be kept “basically stable” and repayment of rebates will be speeded up, he said.
China’s trade surplus (CNFRCBAL) may have narrowed to about $160 billion last year, or about 2 percent of gross domestic product, the ministry said in a separate statement yesterday. That compared with $181.5 billion, or 3.1 percent, of GDP in 2010, according to Chinese government data.
Export growth (CNFREXPY) in November slowed to 13.8 percent, the weakest pace since gains resumed in December 2009 after the global financial crisis, excluding distortions caused by the Lunar New Year holiday. Retail sales rose a more-than-estimated 17.3 percent in the same month.
The ministry will encourage companies to invest and make acquisitions overseas, Chen said. China will also increase imports of energy products, raw materials, technologically advanced equipment, key components, and consumption goods this year, he said.
The government will “steadily” open the education and medical services industries to overseas investors, and will set up a system to review and monitor acquisitions by foreign companies that may affect the country’s security, he said.
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