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E-commerce expected to spur economy

By Wang Qingyun and Chen Mengwei | China Daily | Updated: 2014-10-30 07:50

E-commerce is likely to follow real estate as the next driving force to boost the economy, according to decisions made at an executive meeting of the State Council on Wednesday.

During the meeting, presided over by Premier Li Keqiang, the government designated six fields - e-commerce came first - as crucial to increasing consumption.

The government is set to encourage online consumption by supporting the development of online shopping, helping deliveries of online purchases reach more people in rural areas, and improving the speed of broadband, according to a statement released after the meeting.

"Consumption based on the Internet may become the third important growth point that the central government is searching for to boost the economy, after autos and real estate. The scale of Internet-based consumption may exceed the former two," said Zhang Zhanbin, director of the department of economics at the Chinese Academy of Governance.

The Chinese economy expanded 7.3 percent in the third quarter, the lowest since the global crisis.

The struggling global economy impeded China's exports, and the country needs to tap into its domestic consumption for growth, Zhang said.

The statement said that consumption is an important "engine" for driving economic growth and offers huge potential for helping China maintain this growth.

The government should work to increase residents' income by issuing specific policies that aim to deepen the reform of the income distribution system and divert more revenues gained by State-owned capital to people's livelihood, the statement said.

The government will improve the social security system, stabilize housing consumption and strengthen construction of affordable housing, the statement said.

The housing policy will "help control the proportion it takes in the overall spending by people with lower and middle income, so that they may have more financial resources to spend on other items," said Jia Shen, an assistant researcher with the Development Research Center of the State Council.

Contact the writers at wangqingyun@chinadaily.com.cn and chenmengwei@chinadaily.com.cn

 

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