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Rural Consumption Rising in Central China
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The per capita consumption of farmers in central China's Henan Province grew 16.2 percent in 2006 compared with the previous year, while the consumption of their peers in the urban districts registered a year-on-year increase of 9.4 percent.

This is the first time that the growth rate of rural consumption surpassed that of urban districts in the past decade in Henan, one of the country's leading agricultural bases. Hebei Province, another agriculture base of the country, witnessed similar development.

Experts described the phenomena of rising rural consumption as the result of increasing income for farmers.

Ma Xiaohe, deputy director of the macro-economy research institute under the National Development and Reform Commission, said that the consumption markets have warmed up since 2005, and he attributed the welcome change to the central government's continuous efforts to offer favorable policies for agriculture and farmers.

The central government of China will spend 391.7 billion yuan (about US$48.96 billion) on agriculture, rural areas, and farmers this year, up 52 billion yuan (about US$6.5 billion) as it vows to develop modern agriculture and promote the building of a new countryside said Premier Wen Jiabao in a government work report last Monday.

"We will effectively shift the focus of state infrastructure development and development of social programs to the countryside," Wen told 2,890 lawmakers at the Fifth Session of the 10th National People's Congress (NPC).

Some Chinese enterprises have shown great interest in the rural market, and supermarkets have already been built in some rural areas. China's 900 million farmers have a great potential for consumption, according to Ma.

China's rural consumption in 2005 was 370.5 billion yuan (about US$46.3 billion) higher than that of 2004.

Despite higher consumption, investment and export remain the major components of the country's economic growth, said Xie Fuzhan, director of the National Bureau of Statistics (NBS).

To solve the problem, Xie said, the Chinese government has taken some measures to increase people's incomes, especially in the countryside, though they still remain relatively low by international standards.

(Xinhua News Agency March 14, 2007)

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