January 18, 2010

China reports 15.5% growth in 2009 rural consumption

China's rural market is fuelling the country's economy with record growth in 2009, driven by farmers' rising incomes and various stimulus policies.

Growth in 2009 rural consumption exceeded that in urban areas (15.2%) for the first time, said the Ministry of Commerce on Friday (Jan 15).

The total amount of rural consumption is estimated at RMB4 trillion (US$586 billion), the ministry said.

To increase domestic consumption, early last year, the government launched a series of incentives for farmers ranging from purchases of agricultural machinery to home appliances and electronics.

However, the main reason of the growth can be attributed to the rising income of Chinese farmers, said Xu Xiaoqing, a rural economics expert at the Development Research Centre of the State Council.

The average annual income of Chinese farmers has increased 6% annually since 2004, hitting around RMB5,000 (US$732) last year, according to official statistics.