Consumption to keep growing next year

A latest analysis by Ministry of Commerce sets the growth rate of China's retailing sales of consumer products in 2005 at around 10 percent and the increase of production materials sales at about 12 percent.

The prediction sees great potential for durables such as appliances in rural areas where farmers are on their way to a well-off life after they are adequately fed and dressed. Urban residents will spend more enjoying a better, or even luxurious, life.

Chinese consumers will earn more and represent an enormous market as the country is accelerating its process of new industrialization, urbanization, its development of the country's mid-west and its endeavor on reviving its old industrial base in the northeast, the report says.

Specifically, grain production is expected to keep stable if there is no serious natural disaster. However, grain prices will not go up as sharply as they did in 2004. Excessive supply will be seen on the vegetable oil market due to the over processing capacity.

Pork prices will be pushed higher by the celebration of the New Year's Day and the Spring Festival and level off after that.

The integration of textile trade will likely bring more demand for chemical fiber and cotton, which will in turn inflate the prices of the two materials, but not notably.

Coal, steel and cement will continue to enjoy good days with an increase of more than 10 percent. Housing consumption which has experienced a fast development in recent years will lead the upgrading of consumption structure. Prospect for energy efficient products is quite rosy.

In 2004, sales of consumer products and production materials is expected to top 15 trillion yuan.

The Ministry of Commerce is working on the formulation of guidelines and policies for the development of the circulation sector to stimulate the consumption.

By People's Daily Online