- has cut interest rates eight times in the past few years.
The vast rural populace, which makes up some two-thirds of the country's population, do not have enough money to buy goods, because of the small earnings from limited farmland, the slow progress of urbanization and the little chance for rural labourers to work on equal footing with the urban workers in cities, said Li Xiaochao, a senior official with the National Bureau of Statistics.
The increasing gap between the rich and the poor consequently has a negative effect on the consumer goods market, said Li.
Ni Hongri, a senior researcher with the Development Research Centre under the State Council, said the traditional idea of earning money before spending it limited people's enthusiasm for consuming.
"Chinese people do not have a tradition of using consumption credit," Ni said.
The government needs to take further measures to increase income and thereby stimulate the consumer goods market, Hu said.
He was full of praise for the practice of the "tax-for-fees" reform this year, which aims to increase the income of the rural population.
He said the government should manage to improve the consumption environment in rural areas.
It was not only the low income in rural areas that was holding back consumer spending: The backwardness of the infrastructure, the high price of electricity and low-quality telecommunication facilities all limited consumption, continued Hu.
The government should better publicize the current reforms including those in respect of housing, medicine, pensions and education, so that public confidence in the future improved, Hu said.
The government should also encourage consumption by urging banks to offer more credit, especially for cars and housing, he added.
(China Daily September 17, 2002)
