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Rural consumption rate at 11.6 %

China has taken measures to boost consumption, and making rural area a new growth engine for family spending.

China has announced a cocktail of measures to steam up its consumption sector.

China cut the import taxes for 14 products in June. The average discount is more than 50 percent.

“Lower import taxes may boost domestic consumption and force home grown brands to create better products for the hotter competition,” said Zhang Yulin, researcher of Ministry of Commerce.

“For premium imported products, tax cuts would narrow the gap between prices at home and overseas. That would bring consumers back to the home market,” said Niu Li, research director of National Information Center.

To further unleash the purchasing power in China, the country is eyeing micro loans for consumers.

“Consumption finance products are small loans to consumers. Its unique function is that it’s more frequent than normal loans and each transaction covers only a small amount of money,” said Shao Hang, marketing director of Haier Consumer Finance.

“Consumer finance products unleash more purchasing power. It’s better regulated than private lending. It will drive up the living standard of people,” Zhang Yulin said.

“We see various inclusive finance products in the market. It’s particularly good for consumption growth in the rural areas,” said Niu Li.

The boom in such micro loans is benefiting rural areas. The National Bureau of Statistics says consumers in China’s rural area spent 328.7 billion yuan in the first five months of this year. That’s an annual growth rate of 11.6 percent, which is 1.4 percent higher than in urban areas.