Beijing moves to boost rural consumption

Rural China is the latest target in Beijing’s bid to boost domestic consumption following the announcement of a new government plan on Monday, the Wall Street Journal reported. The plan involves creating jobs, lowering distribution costs and improving product quality and availability in rural areas. As part of these efforts, Beijing will help set up 150,000 stores in the countryside this year, which could create 775,000 new jobs by 2010, according to a Ministry of Commerce official. In recent months the government has also moved to expand state subsidies for farmers to buy electrical appliances. Economists and officials believe stronger consumption is necessary to offset the recent slowdown in exports. Domestic consumption accounted for about 39% of China’s GDP in the first nine months of 2008, compared to about 69% of GDP in the U.S.