China will increase agricul tural subs idies, investment and financial services to rural areas in an effort to spur development and boost domestic consumption, the Xinhua news agency reported Jan. 31.
A document jointly issued by the State Council, China’s cabinet, and the Communist Party’s Central Committee said the measures aimed to “better co-ordinate” urban and rural development.
China faces a widening gap between urban and rural incomes, and despite repeated government promises to address the problem, the disparity increased further in 2009, according to economic data released earlier last month.
The emphasis on rural spending also fits with Beijing’s broader goal of developing consumption as an engine of growth after the export sector slumped during the global financial crisis, a priority highlighted last week by Vice-Premier Li Keqiang at the World Economic Forum in Davos.
Beijing will continue to enhance financial support to agricultural enterprises and farmers, improve agricultural subsidy systems and maintain stability in produce markets, Xinhua said.
More efforts will be made to strengthen financial services including micro-credit loans and insurance in rural areas, the report said. It also called for further expansion of rural markets to help boost consumption.
Last Friday, a senior Ministry of Commerce official, Chang Xiaocun, said total government subsidies to spur rural household consumption in 2010 would surpass the 2009 total, but he gave no specifics.
Various measures are already in place to subsidize purchases of home appliances and vehicles.