Zheng Xinli: Biggest Consumption Potential Lies in Rural Market

By staff reporter ZHANG HONG

A press conference on how to "accelerate the transformation of the economic growth pattern" has been held at the Great Hall of the People. Zheng Xinli, executive vice president of the China Center for International Economic Exchanges (CCIEE) states that the biggest consumption potential lies in the rural market. At present, over two thirds of Chinese population live in the places at and below county level, but they are consuming just one-third of the commodities sold in the nation.

Zhang believes the key to exploiting the full potential of the rural market, which will help boost the country’s economic growth, lies in “increasing the farmers’ incomes, and reducing the rural population. 

 “In the early days of the opening up and reform, city and rural areas represented equal halves of the total retail sales of consumer goods. However, the figure for the rural market has decreased by more than one percent each year over the past three decades, accounting for only one-third of the national total today,” said Zheng.

Zheng also points out that it is important to set up a unified development planning system for cities and countryside, stimulating the flow of surplus rural labors to the secondary and tertiary industries, and escalating the process of urbanization. In Zheng’s calculation once a farmer becomes an urban resident, his personal consumption would double and he would drive a RMB 100,000 investment in infrastructures and public services. “That is to say,” Zheng continues, “Twenty million new urban dwellers will require RMB 2 trillion in investments each year. Therefore, urbanization is the main force to expand the domestic consumption market.” 

In his government work report to the NPC Premier Wen Jiabao mentioned a range of favorable policies for migrant workers to settle down in cities and to help farmers improve their livelihood, such as government subsidies for rural buyers of manufactured goods and building materials.  

“There is good news for those still living in older brick homes in the countryside.” Zheng Xinli says. Along with that, the government intends to raise the procurement pricing of agricultural products in order to increase the farmers’ profits.

Zheng believes that the policies and measures will surely ignite the huge consumption potential of the rural market, which will be the strongest impetus to China’s economic growth in the coming two decades.