New policies to replace expiring subsidies, tax breaks for home appliances, cars

BEIJING - Expanding China's domestic consumption will be a priority of the government's economic work this year, Commerce Minister Chen Deming said on Thursday.

"Despite a challenging global economic situation, China's economic development features many favorable conditions at home in 2012.

"The government will boost domestic consumption while improving the foreign trade structure," Chen said during the ministry's annual two-day work conference, which ends on Friday.

With subsidies and tax breaks for vehicle and appliance purchases ending or about to end, officials are expected to announce new policies to stimulate consumption.

The policies, "including support for the consumption of energy-saving and environmental-protection products, will focus on the recycling of used electronics and vehicles", Chen said.

Amid the global financial crisis in 2008, China began offering subsidies or tax rebates to encourage the public to buy household appliances and vehicles.

Wang Xuanqing, deputy director of the ministry's Department of Circulation Industry Development, said that "energy conservation, environmental protection and emissions reduction will be highlighted" in the new policies.

The ministry will also advance the building of a modern logistics system and boost consumption in rural areas, Chen said.

"The government will improve the quality of shops and stores in 'the thousands of rural villages marketing project' and promote the building of business and trading centers in villages or towns, as well as border areas, to hasten the development of modern rural businesses," he said.

The ministry launched the rural villages marketing project in 2005, using subsidies to attract urban-based supermarkets and chain stores to rural areas and improve the rural consumption environment.

The rural villages marketing project "will definitely continue. The focus this year will be on improving the efficiency of circulation and distribution," said Wang Bingnan, director of the ministry's Department of Market System Development.

The government will pursue policies to develop the transport and storage industry so as to improve the distribution and retail network nationwide, according to Chen.

Auctions, financial leasing and pawning will be encouraged to play important role in easing the financing difficulties confronting small enterprises.

Expanding individuals' consumption of services also falls into the ministry's task of expanding domestic consumption.

"We will encourage personal service industries such as catering, laundering, bathing and home appliance repair services in communities.

"Large and medium-sized cities will be equipped with commercial centers offering life services with a walk of less than 15 minutes," Chen said.

Modern household services will also be promoted along with socialized pension services and healthcare.

In addition, the government will release online shopping regulations and establish a credit system for e-commerce to promote the sector's sound development.

Retail sales will maintain an annual increase of 15 percent during the 12th Five-Year Plan (2011-2015) and reach 32 trillion yuan ($5.08 trillion) by 2015, according to the ministry.

Wang Bin, deputy director of the ministry's Department of Market Operation and Consumption Promotion, said that total retail sales, including rural areas, would post a year-on-year increase of 14 percent in 2012.