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Opinions of the General Office of the State Council of the People’s Republic of China on Invigorating Circulation and Expanding Consumption

To the people’s governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council, and all departments directly under the State Council

To carry out the spirit of the Central Economic Working Conference, upon approval of the State Council, we hereby put forward the following opinions on invigorating circulation and expanding consumption:

1. Improving the rural circulation network to stimulate the rural consumption demand

(1) Continuing to promote the Market Project of “Thousands of Villages and Townships”. Further expand the coverage of countryside stores of such project, and newly build and transform a number of countryside stores and rural commodity distribution centers. Strengthen the goods procurement, storage, processing, allocation, transporting, information and other functions of rural commodity distribution centers, increase the variety of uniformly distributed goods, and reduce operating costs. Promote the combination of the “Thousands of Villages and Townships” network with the networks of supply and marketing, postal services, telecommunications, etc., and improve the comprehensive service functions of countryside stores. Guide the manufacturers to develop the products in line with the features of rural consumption, increase the supply of commodities in simple packaging, at low costs and with good quality, and further expand the rural consumption.

(2) Accelerating the improvement of the circulation network of agricultural products. Perfect the agricultural market information service system, strengthen the information guidance and the linkage between production and marketing, improve the policies on green channel for farm produce transportation, reduce the costs and losses of agricultural product circulation, and make efforts to resolve the problem of difficulty in selling agricultural products to promote the increase of farmers’ incomes. Continue to carry out the “Two Hundred Markets Project” and the project of upgrading and transformation of wholesale markets for agricultural products, newly build or transform a number of wholesale markets for agricultural products and farmers’ markets in key marketing areas and production areas, and strengthen the construction of fresh-keeping in cold storage, sanitation, traceability in quality and safety, inspection and testing, logistics and other facilities. Actively promote the “super-agricultural docking”, support large-scale supermarket chains, agricultural products circulation enterprises and agricultural products specialized cooperatives to set up the bases for direct procurement of agricultural products and cultivate their own brands to promote the convergence of production and marketing. Set up production bases for fresh agricultural products as well as supermarket cold-chain system, logistics and distribution system and rapid detection system, to improve the circulation efficiency and ensure the product quality and safety.

(3) Improving the circulation system of agricultural means of production. Continue to promote the chain-store operation of agricultural means of production, focus on cultivating large-scale enterprises for the circulation of agricultural means of production, and strengthen the construction of agricultural means of production and modern logistics facilities to ensure the market supply. Strengthen the market regulation, control and supervision over agricultural means of production, promote market competitions, reduce circulation costs and earnestly lighten the burdens of farmers. Guide and encourage enterprises for the circulation of agricultural means of production to provide the farmers with technical, farm machinery leasing and other diversified services.

(4) Comprehensively promoting the work of home appliances going to the countryside. As from February 1, 2009, expand the project of home appliance going to the countryside from 12 provinces (autonomous regions and municipalities) to the whole country. At the same time, include motorcycles, computers, water heaters (including solar energy, gas, power modes), air conditioner and other products into the scope of subsidy policy for home appliances going to the countryside, from which all provinces (autonomous regions and municipalities) choose to increase part of the subsidies varieties based on local needs. Local people‘s governments should strengthen leadership, carefully organize and strengthen the supervision to ensure the quality of home appliances going to the countryside, do well in after-sales services, crack down on selling counterfeit and shoddy products in the name of home appliances going to the countryside, earnestly and realistically do a good job in the work of home appliances going to the countryside, and expand farmers’ consumption of home appliances.

2. Strengthening the community service functions and expanding the urban consumption

(5) Further improving urban facilities of community services for convenience of the public. Actively promote the construction of household service network, and encourage large and medium cities to rely on large service enterprises to build household service network centers and integrate resources to provide a safe and convenient household service. Implement the demonstration project for standardized vegetable markets, and select a number of vegetable markets in the cities above the prefecture level to carry out standardized transformation, to provide urban residents with a convenient and safe consumption environment. Advocate catering enterprises to assume social responsibilities and render breakfast services. Encourage leading catering enterprises to develop staple food processing and distribution centers in the cities above the prefecture level, promote the scale and standardization of breakfast businesses, and provide residents with good and cheap, convenient and fast, safe and healthy breakfast services.

(6)

(6) Upgrading and updating the durable goods in urban areas. Correctly handle the relationship between the expansion of consumption and sustainable consumption, and guide the society to form a scientific and recycling consumption pattern. Improve the circulation network of used goods, set up used goods receiving stations and charitable contribution stations in urban communities, and establish second-hand trade markets in large and medium cities and fringe areas to meet the consumption needs of low-income families and poor group. Support leading enterprises to newly build and transform a number of uniformly standardized community waste recycling sites, specialized sorting centers and trans-regional collection and distribution markets through chain-store operation and the like. Encourage production and retail enterprises to carry out “collecting old and selling new” and “old-for-new service” businesses to drive new product sales and resources conservation.

(7) Actively promoting automobile consumption. Improve the measures for the administration of automobile brand sales to promote the steady growth of automobile consumption. Support the transformation of second-hand car markets, advocate automobile brand dealers to carry out old and new automobile replacement businesses, establish second-hand car information platforms, and upgrade and transform second-hand car markets. Enhance the financial supports of automobile scrapping and upgrading, advance subsidy standards, expand the scope of subsidies, and accelerate the elimination of “yellow label vehicles” (vehicles that fail to meet the European No. 1 standard for exhaust emissions) to promote the renewal and upgrading of automobiles. Give necessary supports to the upgrading and transformation of enterprises engaged in recycling and dismantling of scrapped automobiles to enhance recycling skills.

3. Improving the capacity for market regulation and control and maintaining the market stability

(8) Improving the reserve system for residents’ necessities of life. The regions that have not established the reserve of necessities of life should establish it as soon as possible, and those which have established it should add varieties and expand their scales. Speed up the improvement of local finished product grain and oil reserve system. Local governments, in particular, 36 large and medium cities and the regions, in which grain and oil prices are easily fluctuant, should establish a local finished product grain and oil (including grain and oil in small packaging) contingency reserve system and ensure the market supply for more than 10 days. While the construction of the central sugar reserve and cold reserve is sped up, each local government should speed up its construction of local sugar reserve and cold reserve. Seek and establish a commercial agent warehousing system, and guide and encourage enterprises to maintain appropriate inventory levels.

(9) Effectively strengthening the capacity for market emergency regulation and control. Improve the urban and rural market information service system, strengthen the market monitoring, improve the prediction and early warning level, and enhance the predictability of regulation and control. Continue to improve the production and marketing convergence, cross-transporting, reserve and launching, import and export regulating and other mechanisms to enhance the timeliness and pertinence of emergency response and supply.

4. Promoting the development of circulation enterprises and reducing the consumption costs

(10) Cultivating large-sale circulation enterprise groups. Support circulation enterprises, through equity replacement, asset acquisition and other means, to carry out cross-regional merger and reorganization, to be larger and stronger and to form a number of large-scale competitive circulation enterprises and enterprise groups as soon as possible. Support circulation enterprises to speed up the creation of their independent brands and develop sales and logistics networks. Encourage circulation enterprises to develop the chain-store operation, e-commerce and other modern means of circulation, form the operation advantages of unified and standardized management, centralized procurement in batches and timely and rapid allocation of goods, and reduce enterprise operating costs and selling prices to benefit consumers and promote residents’ consumption.

(11) Supporting the development of small and medium commercial and trading enterprises. Support and promote the development of small and medium commercial and trading enterprises, and give full play to their roles in convenient consumption and market stability. Promote the innovation of financial institution products and service modes, and enhance the financing support for small and medium qualified commercial and trading enterprises. Financial institutions should develop differentiated credit conditions and renew means of security based on the characteristics of commercial and trading circulation enterprises, and solve the problems of loan mortgage of small and medium commercial and trading enterprises through the pledge of movable property, accounts receivable, warehouse receipts and the like; allocate special funds to support the development of eligible small and medium commercial and trading enterprises.

(12) Introducing the policy on the same prices of commercial and industrial electricity and water. Implement the policy on the same prices of commercial and industrial electricity as encouraged by the state as soon as possible. Qualified provinces should implement the policy on the same prices of commercial and industrial water as encouraged by the state in 2009, so as to effectively reduce the burden on enterprises.

5. Developing new consumption patterns and promoting the consumption upgrading

(13) Actively fostering and developing new consumption hot spots. Timely release the market supply and demand information to guide enterprises to adjust product structures, and develop marketable goods and services to guide the upgrading of consumption structure. Expand the consumption concerning electronic information, communication products, education and training, household services, culture and entertainment, sports and fitness, tourism and leisure and the like. Guide the personalized, popularized and branding consumption, and cultivate and develop custom-made consumption. Carry out the activities such as “famous brands into good shops” and “brand name products going to the countryside”. Promote the construction of featured shopping streets, and support the innovation and development of “time-honored shops”. Cooperate with the construction of comfortable housing projects, and expand and promote the consumption of furniture, home appliances, home textiles, home decoration and the like.

(14) Vigorously promoting holiday and exhibition consumption. Actively carry out various marketing activities by use of the features of leisure time on holidays, deep festive mood and the public’s strong desires to purchase, to expand the market. During the New Year‘s Day and the Spring Festival in 2009, organize the retail and service enterprises in large and medium cities across the country to carry out “festival season” activities. Integrate social resources to carry out various content-rich consumer promotion activities according to local conditions. Promote the development of exhibition industry, and drive the relevant consumption regarding accommodation, catering, transportation, communications and the like.

(15) Further promoting the use of bankcards. Strengthen the banking-commerce cooperation to enhance the electronic settlement level, expand the use of bankcards and facilitate the payment by card. Perfect the supporting policies for payment by bankcard, guide the operators to use bankcards for settlement, and facilitate the consumers to use bankcards for payment. Encourage the competition, perfect the electronic payment environment, and further improve the efficiency of financial services.

(16) Vigorously developing credit sales. Actively promote the development of domestic trade credit insurance, promote and standardize the development of commercial credit services, support the establishment of credit risk sharing mechanisms, effectively prevent credit risks, promote the development of credit sales, and relieve the capital turnover pressure on enterprises.

6. Effectively improving the market environment and promoting the safe consumption

(17) Paying close attention to food safety of circulation enterprises. Improve market information systems and regulatory public service platforms in the field of circulation, and enhance the supervision over the food quality and safety of circulation enterprises. Accelerate the establishment of a “quality-assured meat” supervision system to combat private and disordered slaughtering; strengthen the monitoring on the harmless disposal of designated slaughtering enterprises and establish a traceable meat quality information system; Select 50 large, around 1,000 small and medium meat production enterprises to go through standardized transformation to effectively improve meat safety and security levels. Each local government should also devote greater efforts to speed up the establishment of a food safety supervision system.

(18) Strengthening the market supervision, and improving the trading environment. Actively promote the establishment of market integrity system, combat various illegal behaviors such as sale of fake and shoddy goods and commercial fraud, maintain a good market order and transaction environment, boost the consumer confidence, and promote the safe consumption.

(19) Accelerating the establishment of a unified, open, competitive and orderly market system. Break barriers between the regions and maintain fair competition to safeguard the free circulation of goods. Regulate the retail business operations, accelerate the development of fair trade administration regulations for retailers and suppliers, promote model texts of goods purchase and sales contracts, and remove the unreasonable charges to the suppliers. Guide retail enterprises to standardize the promotions.

7. Increasing the financial capital investment to support the development of circulation industry

(20) Increasing the financial capital investment. The central government should increase the special funds for the development of the rural logistics service system and promote the size of the special funds for the development of service industry in 2009, and should continue to increase investment in the subsequent years. Stimulate the enthusiasm of the local governments and the public for investment by means of giving rewards in place of subsidies and interest subsidies, to support the development of the rural circulation system and the urban services system. These policies shall be put into effect by the Ministry of Commerce in consultation with the Ministry of Finance.

General Office of the State Council

December 30, 2008


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