China's government and the domestic market are calling for greater spending. Economic growth may be maintained, writes Huo Weiya, but US-style living may mean we need another two Earths.
To maintain an 8% economic-growth target through the current global financial crisis, the Chinese government has launched an investment stimulus package worth four trillion yuan (US$585 billion) and eased bank-lending restrictions. But another important measure is the increasing of individual consumption.
In 2008, the Chinese government launched "village appliance" schemes nationwide, with subsidies used to increase sales of televisions, refrigerators, washing machines and mobile phones in rural areas. Another two billion yuan (nearly US$300 million) was invested in 2009 in a "new-for-old" policy that will see individuals and businesses sell old appliances back to the state and receive a 10% subsidy on new purchases. Besides this, the automobile market is benefiting from subsidies and tax breaks, and many cities have handed out shopping vouchers to local people.
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