China aims domestic consumption for stable growth in 2010

China is pledging to strengthen policies to encourage domestic consumption next year. The State Council made that decision at a regular meeting on Wednesday, presided over by Premier Wen Jiabao. Also discussed were adjusting and improving policies aimed at increasing support to farmers and low-income earners.

The State Council believes uncertainties still exist in economic development. The government will therefore maintain most of its pro-consumption policies next year to ensure stable and fast growth.

Extend home appliance subsidies

It will extend subsidies on purchases of home appliances in rural areas. Specifically, it will raise the upper limits of prices for targeted products and improve subsidy standards. Local governments are also allowed to add one category to the subsidized scope based on local situations.

Extend car subsidies

The State Council is also extending subsidies for car purchases in rural areas. While subsidies for motorcycles will be in place till January 31st, 2013.

Continue home appliance replacement

Pilot projects on home appliance replacement will also continue. That project was scheduled to finish at the end of May. More areas are expected to be included in the projects.

Extend agricultural machinery subsidies

The government will also increase funding to the purchase of agricultural machinery and tools, while extending the policy. So far, 13 billion yuan worth of subsidies had been offered, benefiting 3 million households.

Extend energy-saving projects

The government will also continue to encourage the purchase of energy-saving products. A pilot program for new energy vehicles will be expanded from 13 cities to 20.

Extend tax cut on smaller cars

The State Council will also extend the purchase tax cut on vehicles with engines of 1.6 liters or smaller till the end of next year. Subsidies for auto replacements will be raised to 18-thousand yuan.

The government is expected to include a social security fund in its budget to improve management of the fund.

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For more insight on today's meeting and China's pro-consumption policies. We speak to Dr. Tang Min, Deputy Secretary General of the China Development Research Foundation. Full story >>