Month-long stimulus project launched by Commerce Ministry

A month-long consumption stimulus program was launched by the Ministry of Commerce on Monday in a bid to boost domestic demand and offset the impact of declining exports.

Stimulating domestic consumption is a long-term goal and is the most important task for the ministry this year, according to Fang Aiqing, assistant commerce minister.

More than 80,000 commercial enterprises nationally are set to join the program. City malls and restaurants are also poised to boost consumer demand, a statement released by the ministry said. The program will end on May 4, three days after Labor Day.

China is looking to boost domestic consumption to power the economy and offset declining export demand.

"The global economic situation remains unclear, so domestic consumption should play a more important role in powering the economy," said Jiang Zengwei, vice-minister of commerce.

Statistics from the General Administration of Customs showed that exports declined by 0.5 percent over the year to January, the first fall in more than two years. From January to February, exports to the European Union, China's largest trading partner, dropped by 1.1 percent from a year earlier.

This is the first month-long consumption stimulus program. But according to a joint statement released by the ministries of commerce, finance and the People's Bank of China in October, similar programs will be launched over the coming years.

A draft plan for economic and social development, proposed at the annual parliamentary session in early March, envisions "vigorously expanding" domestic demand while maintaining steady and robust economic development.

"Enlarging domestic demand is the priority for China's economic structural readjustment," said Vice-Premier Li Keqiang at the opening ceremony of the Boao Forum for Asia Annual Conference 2012.

China and other Asian economies should promote internal engines of growth and stay open and inclusive to achieve sound and sustainable development, Li said.

"The consumption stimulus was aimed at potential customers and developing demand," explained Fang from the Commerce Ministry.

The government is also likely to implement policies this year to make Internet purchasing easier and provide better access to healthcare services, he added.

Although officials from the ministry did not give details on how much the project could help boost the retail market, the ministry's earlier estimates showed that retail sales in China are expected to grow by 15 percent year-on-year in the first quarter.

The total volume of retail sales of social consumables amounted to 3.4 trillion yuan ($540 billion) in the first two months of this year, up 14.7 percent year-on-year. But the figure was 1.1 percentage points lower than the same period last year, data released by the ministry showed.

gaoyuan@chinadaily.com.cn

(China Daily 04/03/2012 page2)