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CHINA TO DOUBLE RURAL INCOMES TO BOOST CONSUMPTION

Dune Lawrence

Bloomberg, October 13, 2008

China's Communist Party aims to double rural incomes in a bid to boost domestic consumption amid global financial turmoil that threatens to slow economic growth.

The government aims to achieve those goals and eliminate “absolute” poverty in rural areas by 2020, the party's ruling Central Committee said in a statement distributed late yesterday by the official Xinhua News Agency.

The report gave no details on changes such as extending the tenure of farmers' leases and boosting their ability to trade and borrow against land. State-media reports and analysts had highlighted land-use rights reform as the major potential outcome before the meeting.

China's party leaders, who met Oct. 9-12 in Beijing, have made “harmonious development” a cornerstone of their policy, shorthand for addressing income disparity and uneven expansion in the world's fastest growing major economy. Unleashing the economic power of the 737.4 million people who live in the countryside has taken on added importance as China faces a global slowdown.

“Maintaining employment and household consumption will be a key objective for government policy” in the face of the international financial crisis, Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong, wrote in an e- mailed report today. Agricultural reforms will be “positive” for “rebalancing the sources of economic growth,” she said.

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