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Fiscal policy to remain proactive
( 2002-02-25 09:19 ) (1 )

The macroeconomic environment will be favourable for the further development of China's consumer goods market this year.

The central government has already decided China will continue to implement a proactive fiscal policy and a steady monetary policy in 2002, said Hu Shaowei, a senior economist with the State Information Centre.

The country is likely to issue about 150 billion yuan (US$18 million) of treasury bonds this year, Hu said.

"This will provide an improved environment for the further growth of the consumer goods market," he said.

The measures taken last year to raise salaries of public servants, provide compensation for laid-off workers and to increase pensions for retirees will undoubtedly help improve people's income levels, stimulating consumption this year, he said.

"The country will continue to take measures to raise the income levels of its residents this year," Hu said. "The new measures include the 'fees-for-tax' reform in rural areas."

The nation has also fostered a certain number of "hot areas" for consumption in past years, said Niu Li, another senior economist with the centre.

More individuals have begun to buy their own houses thanks to the country's housing reform.

The accelerated pace of privatization of the housing sector has also given rise to the consumption of related products such as furniture and home appliances, Niu said.

Because of the price drop of cars in the wake of China's membership of the World Trade Organization, more people have begun to buy their own vehicles.

The country's extension of the week-long National Day and May Day holidays have also resulted in booming tourism and holiday consumption.

"These hot areas will continue to have a strong impact on the country's consumer goods market," Niu said.

Ni Hongri, a senior researcher with the Development Research Centre under the State Council, said people will buy more imported goods this year because the prices of these goods will drop due to the tariff cuts.

"People are now capable of buying goods which China cannot produce," Ni said. "The lower price of imported goods will also help suppress prices for similar domestic goods."

But the three experts agreed that China's consumer goods market also had unfavourable elements.

"The September 11 terrorist attacks have accelerated the recession of the economy in the United States, which will have negative effects on the world economy," Hu said.

The number of people losing their jobs would rise in 2002 because of the accelerated reform of government and institutions, he said.

 
   
 
   

 

         
         
       
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