China's sales of consumer products is rising at a higher rate and its contribution to China's economic growth is getting bigger.

A report released by the State Information Center Friday estimates that sales of consumer products rose 13.4 percent year- on-year in the first quarter to 1,454.99 billion yuan (175.9 billion US dollars), 2.7 percentage points higher than the growth rate in the same period last year.

"The figures are 14 percent and 11 percent respectively in urban areas and rural areas," the report says.

"The driving force of China's economic growth is changing," said Qi Jingmei, advanced economic analyst with the State Information Center.

In recent years, China's economic growth has been marked by high investment and low consumption, which is not good for development.

The central government has made it clear it wishes to promote the role of consumption in economic development.

"This is the policy basis of fast growth of sales of consumer products," said Qi.

Since latter half of last year, China's consumer products market has seen fast growth, particularly in the few months near the end of the year when the industrial output and investment both slowed down.

Qi predicted consumption demand would remain strong in 2005.

Consumption in rural areas is likely to become a bright point in China's consumption increase, the report with the State Information Center predicts.

Last year, farmers' incomes saw a rapid increase, stimulating rural consumption with electric home appliances as the major consumer products.

"This year, consumption will grow larger in rural areas," said Qi.

Cars and houses will remain the main products in the change of consumption structure and consumption growth in urban areas. Despite last year's stagnant market, production, sales and prices of cars have picked up this year.

The rapid increase of service consumption is another important factor contributing to continuous rise of sales of consumer products.

When the average gross domestic product per capita is above 1, 000 US dollars, there will be less consumption of products but more of service.

Chinese residents are already spending more on dining and tourism. "The trend will be more obvious in 2005," said Qi.

Source: Xinhua