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China boosts information consumption

Updated: 2013-08-14 17:08
( Xinhua)

BEIJING -- Authorities are aiming to boost the consumption of information products and services and make the sector a new engine for boosting domestic demand and driving economic growth.

By the end of 2015, the consumption of information products and services is expected to grow at an annual pace of at least 20 percent to reach 3.2 trillion yuan ($518 billion), according to a guideline released by the State Council, or China's cabinet, on Wednesday.

"As China's personal consumption is upgrading and the country is undergoing the processes of industrialization, informationization, urbanization and agricultural modernization, information consumption has a sound foundation and tremendous potential," the guideline says.

"Boosting information consumption can invigorate domestic demand and act as a new growth point for the economy, as well as upgrade the service industry, promote economic restructuring and improve people's lives," it says.

The guideline highlights innovation and the power of market forces as ways to promote rapid and healthy information consumption.

The value of industries that are supported by information consumption is expected to be boosted by 1.2 trillion yuan by the end of 2015, according to the guideline.

Internet-based consumption should grow by at least 30 percent annually to 2.4 trillion yuan, according to the guideline.

According to the data published by the Ministry of Industry and Information Technology (MIIT), China's e-commerce sector raked in 4.98 trillion yuan in revenue in the first half of this year, up 45.3 percent year on year.

Consumption of information products and services jumped 20.7 percent year on year to 2.07 trillion yuan, while the output of smartphones surged 120 percent to 214 million units.

With China's economy posting a prolonged slowdown in the past two years, the government has resolved to boost domestic demand to rebalance its outdated growth model that is overly reliant on investment and exports.

But the rebalancing drive remains an arduous task. In the first half, consumption constituted 45.2 percent of GDP growth, compared with 53.9 percent from investment, according to the National Bureau of Statistics.

The guideline also outlines the major tasks for promoting information consumption. To upgrade telecommunications infrastructure, the government will release 4G mobile communications licenses later this year.

By the end of this year, the government will also push the integration of telecommunications, Internet and broadcasting networks into one complete system covering the entire nation.

The guideline underscores the need to beef up domestic production of information hardware, including smart phones, television sets and portable electronic devices.

Despite the growth, institutional hurdles are blocking the industry's sustainable expansion. State-owned companies dominate the industry due to their monopolistic status.

The guideline encourages private capital to invest in the telecommunication industry, such as research and manufacturing of an integrated circuit.

Small information business-based companies are entitled to enjoy preferential financial support. The government will continue to simplify the administrative approval procedures and cut taxes for those businesses.

 
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